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TMI Blog2018 (9) TMI 1734X X X X Extracts X X X X X X X X Extracts X X X X ..... porters were identified. One such importer is the Noticee M/s. Top Notch Infotronix (India) Private Ltd, who is the appellant in appeal No. C/40742/2016. Further investigations were conducted including recording statement from various person. Pursuant to the investigation of Show Cause Notice was issued to the appellants dt.6.8.2013. After due process of law, the Commissioner confirmed the classification of the goods namely multimedia speaker to under 85198100/85271300. Consequently, duty was re-determined and order passed confirming the differential duty and also ordered confiscation of the goods seized and imposed redemption fine besides imposing penalties under various sections of the Customs Act, 1962. The Commissioner however did not impose any penalty under section 112 (a) on M/s. King Shipping Services Pvt Ltd who is a co-noticee. Aggrieved by the finding with regard to the classification of the goods, confirmation of differential duty and penalties imposed, M/s. Top Notch Infotronix (India) Pvt Ltd, who is the importer has filed Appeal No. 40742/2014. The Director of the said company, Sh. Rajesh Kumar Doshi and Sh. Sandeep Kuar Doshi have filed the appeals C/40736/2016 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs, Cochin (supra), wherein the Tribunal observed as under :- "4. We have considered the submissions made by both the sides. We have also gone through the contending tariff entries which stand reproduced by us in the preceding paragraphs. There is no dispute on the facts that some of the speakers being imported by the appellant have USB port with USB playback in addition and some of them have the facility of F. M. radio also. As is seen from the above reproduced entries, Heading 8518 22 00 covers "Multiple Loudspeakers, mounted in the same enclosure". The product in question has been shown to us in the Court Room. The loudspeakers are in different sizes and some of them are the typical loudspeaker sizes seen in most of the functions where the sound received from outside sources gets amplified, as per requirement of the user. Of course the Revenue is not disputing the classification of the same. However, wherever the speakers have an additional facility of USB port, which has been explained to us as a facility wherein a pen drive can be inserted and the sound recorded in the pen drive can be amplified by the speaker, Heading 8519 covers "Sound recording or reproducing appa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sifiable in heading 8518, overlooks the fact that the HS nomenclature only mentions functions and does not refer to the complexity or sophistication of these functions. It appears that any sound reproducing playback device or reception apparatus for radio-broadcasting will need speakers for its effective functioning. 5. The classification of goods is to be determined by application of the General Rules for the Interpretation (GRIs) of the First Schedule to the Customs Tariff Act (CTA), 1975. GRI 1 requires that, "in classifying articles, for legal purpose it shall be determined according to the terms of the headings and any relative Section or Chapter Notes,..". Hence, all relevant legal texts must be considered. In this regard, Note 3 to Section XVI stipulates that, "unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of per-forming two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function". 6. During discussions held at the time of Conference, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 8519 and the speakers with FM radio would fall under Heading 8527, the Board has referred to the General Rules for the interpretation specifically to Rule 1 and to Section Note 3 to Section XVI. The said Note is to the effect that where composite machine consists of two or more machine, the classification would be decided depending upon the machine which performs the principal function. However, we find that the principal function of the "Multimedia Speaker" is amplification of the sound and the USB port or FM radio is an additional feature introduced to such speakers. Looking at the speakers produced before us, and by appreciating the fact that the lower authorities have admittedly held the goods in question to be "Multimedia Speaker", though with additional facilities, it leads to inevitable conclusion that the main and principal function of the product is as speaker. As such, according to us, even in accordance with Section Note 3 to Section XVI, the items in question have to be classified as speakers as admittedly that is the principal function of the product. The interpretation adopted in the said Circular is, in fact, contrary to the interpretation adopted by the Board in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said order is re-produced as under :- "we have heard learned counsel for the appellant. Delay condoned We find no reason to interfere with the impugned judgment. The appeal is accordingly dismissed." 7. The Delhi Bench of the Tribunal in Global Enterprises (supra) has considered the very same issue and has held as under:- "7. We note that almost similar issue of classification of multimedia speakers having additional function of USB port and FM radio came up for consideration by the Tribunal in Logic India Trading Company - 2016 (337) E.L.T. 65 (Tri. - Bang.). The Tribunal held that the impugned goods are speakers with added function and the main role of the item, in question, remains amplifying the sound received from outside source or from inbuilt feature. Applying the interpretative rules and section note 3 of Section XVI, the Tribunal held that the product should be classified as speakers only. The said decision is affirmed by the Hon'ble Supreme Court in 2016 (342) E.L.T. A34 (S.C.)." 8. Following the decisions as cited above and taking note of the facts of the case, we are of the considered opinion that the impugned order cannot sustain. The same is set aside. The app ..... 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