9911796707
TMI Blog2025 (1) TMI 1456X X X X Extracts X X X X X X X X Extracts X X X X ..... nder CTH 8518.
Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... er, CD players, MP3 players, time code recorders, etc. In our opinion, the speaker is primarily a speaker and some additional feature or facility for use of USB playback will not convert the same into a product equivalent to the products covered by Heading 8519. Similarly, Heading 8527 takes into its ambit the "Reception apparatus for radio-broadcasting, whether or not combined, in the same housing". The additional feature of FM radio in the speaker, in our opinion, would again not convert the huge speaker into a FM radio. Even going by the common parlance test, nobody would buy a huge speaker for the purpose of FM radio. 4.1 At this stage, we may advert to the Circular No. 27/2013-Cus., dated 1-8-2013 which alone stands relied upon by the lower authorities for coming to the conclusion against the assessee. The said circular stands given by the Ministry of Finance on the representations received from the industry in respect of the identical products being imported. The opinion as expressed in the said circular is based upon the outcome of the Conference of Chief Commissioners of Customs and Directorate General on the Customs Tariff and allied matters. Relevant paras of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubwoofers, contain a built-in audio amplifier. The sub-heading under which speakers are classified depends on the number of "drive units" - the actual loudspeaker cones or ribbons - in each cabinet or enclosure. Speakers with a single drive unit in each cabinet are classified under sub-heading 8518 21. Speakers with more than one drive unit in each cabinet - for example one woofer and one tweeter - are classified under sub-heading 8518 22. Speakers that are not mounted in a cabinet or enclosure are classified under sub-heading code 8518 29. (b) "Speaker with USB Port having USB playback but without FM radio", the principal function of the device is imparted by USB playback facility. Therefore the said multifunction speaker system is classifiable in sub-heading 8519 81 of the Harmonized Customs Tariff, which provides for Sound recording or reproducing apparatus: Other apparatus: Using magnetic, optical or semi-conductor media: Other: Other. (c) "Speaker with USB port having FM radio but without USB playback" the principal function of the device is imparted by Radio (reception apparatus for radio-broadcasting) and hence the multifunction speaker system classifiable under sub-he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " was the subject matter of consideration. The cellular phones are classifiable under Heading 8517 12 of the Customs Tariff Act. It was observed that as a result of advanced technology, the cellular phones have additional features of word processing, email, internet, global positioning system, personal digital assistant (PDA), GPS receivers, camera and many other features. After taking into account the various provisions of law, it was observed as under : "2. It is represented that mobile, cellular handset/telephone has the essential characteristic of transmission and reception apparatus, such as aerial, display screen, keypad and that the same should be of small size so that it can be hand-held and is of lightweight for use as telephone instrument. The other functions such as radio receivers, music players, e-mail, net browsers, calculators, stopwatch, alarm, computing on software platform are subsidiary to the main function of transceiver. 3. ……….. 4. ……….. 5. In terms of the First Schedule to the Customs Tariff, "telephones for cellular networks or other wireless networks, push-button type or other", would be classifiable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PDA or pocket PC or camera or GPS receiver, contained in cellular/mobile phones, though represent as composite machine, for the purpose of classification, it will be governed by the Customs Tariff Act and the General Rules for Interpretation (GRI) as explained in para 4 above. Accordingly, in terms of Section Note 3 to Section Note XVI when the goods satisfy the following conditions these would be characterized as transmission apparatus in cellular/wireless network rather than as an Automatic Data Processing (ADP) machine or camera or GPS receiver. i. use transmission of signals (representing speech, messages, data or pictures) by means of electromagnetic waves which are transmitted through the ether without any line connection i.e., wireless, in any of the bandwidth allotted to mobile/cellular networks say 850 MHz to 1900 MHz; and ii. consist of transmission and reception hardware such as transceivers, antenna, microphone, speaker, battery, radio-frequency chip, basic band chip, power management chip, Subscriber Identity Module (SIM), International Mobile Equipment Identity (IMEI) or other unique identity for cellular/mobile phone as well as radio-frequency transmission soft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded that inasmuch as the essential purpose of the mobile phone is to communicate, the additional features of having so many other functions will not convert the phones into any other item. As the goods are being marketed and being purchased by the consumers as smart phone or other similar cellular or mobile phone, the additional facilities will not convert the phones into any other item. 4.3 In fact to the same effect is another circular of the Board being Circular No. 20/2013-Cus., dated 14-5-2013 wherein it was held that the classification of the "Tablet Computer" having an additional facility of connecting to an cellular network to make a voice calls will not make the Table Computer divert from its main function and Table Computer would remain so. 4.4 When all the three circulars are viewed together, it is seen that the opinion expressed by the Board in Circular dated 1-8-2013 in respect of "multifunctional speaker system" is diagonally opposite to the opinion expressed in the earlier two circulars being Circular No. 17/2007-Cus., dated 19-4-2007 and Circular No. 20/2013-Cus., dated 14-5-2013. In the other two circulars, the same Interpretative Rules have been taken into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are primarily sold as speakers. Even the brochures placed on record indicate that the goods are being traded as speakers only and not as either FM radio or the sound reproduction system. 4. The aforesaid decision has been subsequently followed in a series of cases of similar nature. Thus, in the case of Global Enterprises vs Commissioner of Central Excise, Delhi-II(2017/354/ELT 548(Tri-Del.), identical question of law was considered. The Tribunal held the classification of the said goods under CTH 8518. The relevant paras thereof are reproduced below: - 4. We have heard both the sides extensively and perused the appeal record, written submission and sales brochure of the impugned products. We take up for consideration, first the classification of multimedia speakers. There is no dispute about classification of such multimedia speakers without FM radio under CETH 8518 40 00. The dispute is only with reference to classification of multimedia speakers with FM radio. The Revenue held a view that the same is classifiable under CETH 8527 99 90, whereas GE contended that the same will be classifiable like any other multimedia speakers under CETH 8518 40 00. For better appreciation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appreciating the factual details of the impugned goods, commercial parlance as to how it is brought and sold and also applicable scope of tariff entries in terms of the provisions of section note/chapter note. We reproduce the pictorial representation of multimedia speakers with built in FM radio as below : 6. We note the product, as represented above basically contains two speakers and a woofer. FM radio is built in, in the woofer. The whole set is a multimedia speaker system generally connected to other devices like computers or audio players for sound output. A comparison of the above goods with multimedia speakers + sub-woofer, without FM radio, indicates that both the products are almost identical except for the fact that in one, there is an additional built in FM radio, in the sub-woofer. We are not in agreement with the lower authority in the conclusion that the speaker system combined with sub-woofer having built in FM radio, attains clearly defined function of an FM radio rather than a speaker system. In a plain trade parlance it is clear and apparent that a person intend to buy a multimedia speaker system will consider the impugned product for his requirement. The FM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods in question are properly classifiable under Chapter Heading 8518 22 00. We may also add that the invoices raised by the seller of the goods stand examined by it and the description stand given as "Multimedia Speaker". This also reflects upon the fact that the goods in question, in common parlance are also traded as speakers. The appellants have also submitted an affidavit of the dealers, the invoices raised by them against the customers and the statement of Service Manager of the assessee. Examination of these documents shows that goods are primarily sold as speakers. Even the brochures placed on record indicate that the goods are being traded as speakers only and not as either FM radio or the sound reproduction system." 6. The detailed analysis of the classification of all such Audio-Visual Receivers was also undertaken independently by this Tribunal in the case of ONKYO SIGHT & SOUND INDIA PVT.LTD. vs Commissioner of Customs, Chennai(2019(368)ELT 683(Tri-Chen.), wherein too the Southern Regional Bench of the Tribunal did not agree with the department's stance for classification of the said products under CTH 8527 and had retained the CTH 8518 claiming the goods as Audio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
