2022 (6) TMI 1403 - AAR - Customs

Classification of goods intended to be imported - Creative Touch 5-series Interactive Flat Panel (IFP) (Model-5652RK 5752RK 5862RK) - classifiable under CTH 8471 4190 or not - whether the impugned goods namely Creative Touch 5-series Interactive Flat Panel can be considered as ADP machines? - HELD THAT - The machines which operate only on fixed programs i.e. programs which cannot be modified by the user are excluded even though the user may be able to choose between a number of such fixed programs. The digital data processing machines have storage capability and also stored programs which can be changed from job to job. Digital machines process data in coded form. A code consists of a finite set of characters (binary code standard six-bit ISO code etc.). The data input is usually automatic by the use of data media such as magnetic tapes or by direct reading of original documents etc. There may also be arrangements for manual input by means of keyboards or the input may be furnished directly by certain instruments (e.g. measuring instruments) - Digital data processing machines may comprise in the same housing the central processing unit an input unit (e.g. a keyboard or a scanner) and an output unit (e.g. a visual display unit) or may consist of a number of interconnected separate units. In the latter case the units form a system when it comprises at least the central processing unit an input unit and an output unit. Two of these units (input and output units for example) may be combined in one single unit. Two or more of these systems may be interconnected thus constituting e.g. a local area network (LAN). These systems may include remote input or output units in the form of data terminals. Such systems may also include peripheral units apart from the input or output units designed to increase the capacity of the system for instance by expanding one or more of the functions of the central unit. Open-source information as well as the submissions of the applicant portrays the subject item as an A10 which is a fully functional ADP machine that operates without restrictions. The AIO is equipped with hardware and software that allow it to perform without artificial constraints general computing tasks where users are free to add or remove applications of their choosing In a similar matter the principal bench of CESTAT New Delhi in M/S. INGRAM MICRO INDIA PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS (IMPORT) NEW DELHI 2022 (2) TMI 308 - CESTAT NEW DELHI have held that goods would merit classification under CTI 8471 41 90 as claimed by the appellant and not under CTI 8528 52 00 as claimed by the department. Thus Creative Touch 5-series Interactive Flat Panel (IFP) (Model5652RK 5752RK 5862RK) merit classification under sub heading 8471 4190 of the first schedule to the Customs Tariff Act 1975.

Summary

Issues Involved:
1. Classification of Creative Touch 5-series Interactive Flat Panel (IFP) under Customs Tariff.
2. Examination of the product's functionality as an Automatic Data Processing (ADP) machine.
3. Consideration of jurisdictional commissionerate comments and previous similar cases.
4. Evaluation of Chapter Note 5(A) to Chapter 84 of the Customs Tariff Act, 1975.
5. Analysis of the product's compliance with the criteria for ADP machines.
6. Comparison with previous rulings and decisions by the CESTAT and other authorities.

Detailed Analysis:

1. Classification of Creative Touch 5-series Interactive Flat Panel (IFP) under Customs Tariff:
The applicant, M/s. Compuage Infocom Limited, sought an advance ruling on the classification of Creative Touch 5-series Interactive Flat Panel (IFP) under CTH 8471 4190. The product is described as an all-in-one (AIO) computer system with integrated components such as a Mother Board, MT9950 Micro Processor, Graphics Card, RAM, SSD Storage, and an embedded Android system. The applicant proposed that these goods should be classified under CTH 8471 4190.

2. Examination of the product's functionality as an Automatic Data Processing (ADP) machine:
The product functions like a large tablet computer with extensive connectivity and versatile compatibility with various operating systems (Windows, Mac, Chrome OS). It has built-in features such as Marketplace, Cloud Drive, and file manager, and offers screen recording capabilities. The product's hardware and software configuration suggest it is more than a mere display unit, thus qualifying it as an ADP machine.

3. Consideration of jurisdictional commissionerate comments and previous similar cases:
The jurisdictional commissionerate of Nhava Sheva-V had previously reclassified similar goods imported by M/s. Cloudwalker Streaming Technologies under CTH 85285900, which was contested and overturned by the CESTAT. The department decided to file an SLP before the Supreme Court against the CESTAT's decision. However, no pending case was identified for the current applicant, allowing the authority to proceed with the ruling.

4. Evaluation of Chapter Note 5(A) to Chapter 84 of the Customs Tariff Act, 1975:
The applicant argued that the IFP meets all the criteria outlined in Chapter Note 5(A) to Chapter 84, which defines an ADP machine. The conditions include the ability to store and execute processing programs, being freely programmable, performing arithmetical computations, and executing programs without human intervention.

5. Analysis of the product's compliance with the criteria for ADP machines:
The product's capabilities were scrutinized in detail:
- Storing Processing Programs: The IFP has sufficient memory to store operating systems and other software programs.
- Freely Programmable: Users can download and install applications as needed.
- Performing Arithmetical Computations: The IFP can perform computations based on user input.
- Executing Without Human Intervention: The CPU and operating system can execute commands autonomously.

6. Comparison with previous rulings and decisions by the CESTAT and other authorities:
The authority referenced a similar case involving M/s. Ingram Micro India, where the CESTAT classified similar goods under CTI 8471 41 90. Additionally, a previous ruling (CAAR/Mum/ARC/04/2022) also classified the Creative Touch 5-series IFP under CTH 8471. These precedents supported the applicant's classification claim.

Conclusion:
Based on the detailed analysis of the product's characteristics, functionality, and compliance with the criteria for ADP machines, the ruling concluded that the Creative Touch 5-series Interactive Flat Panel (IFP) (Model-5652RK, 5752RK, 5862RK) merits classification under sub-heading 8471 4190 of the first schedule to the Customs Tariff Act, 1975.