2017 (3) TMI 1432 - AT - Customs

Classification of imported goods - HP Slate 6 Voice Tab - whether the Impugned goods are classifiable under 8471 as an automatic data processing machine or under 8517 as telephone for cellular network? - Held that - It is evident that the goods are capable of use both asset as cellular telephone as an automatic data processing machine (Tablet). With the advances and technology, there is a thin line between a tablet capable of being used as a telephone as well as a telephone capable of being used as a tablet - The WCO guidelines suggest classification of tablet as an Automatic Data Processing Machine under 8471 in cases where the machine has dimensions as mentioned. But, the dimensions of the Impugned goods are smaller in comparison with the WCO guidelines for tablet, computers. Accordingly, in line with the WCO guidelines, the impugned goods may not be classifiable under 8471. Once the classification under 8471 is ruled out, the alternate classification suggested is under 8517 - the goods merit classification under 8517 and not under 8471 - appeal allowed - decided in favor of appellant.

Issues involved:
Classification of imported goods under Customs Tariff Item (CTI) 8471 or 8517.

Analysis:
1. The appeal challenged an order passed by the Commissioner Appeals regarding the classification of imported goods, 'HP Slate 6' Voice Tab, initially classified under CTH8517 by the appellant but reclassified by the Department under CTI 8471 30 10 as a personal computer. The appellant paid duties at the higher rate under protest. The Commissioner Appeals upheld the reclassification, leading to the present appeal.

2. The main grounds of appeal included arguments that the goods were multi-function devices primarily for telephony, citing CBEC Circulars 17/2007 and 20/2013. The appellant contended that the goods' size and functionality aligned more with being classified under CTH 8517, as they were hybrid devices between a phone and a tablet, commonly referred to as phones in trade parlance.

3. The appellant presented export invoices showing the goods were classified as telephones under 8517 12 90 in the country of export, Singapore. The Revenue argued that the goods were essentially tablets with voice calling features, falling under 8471, based on technical specifications and advertising descriptions.

4. The Tribunal observed that the goods were advertised as more than a tablet, smarter than a phone, with technical features supporting both tablet and phone functionalities. It noted the thin line between devices capable of being used as both a tablet and a phone.

5. Considering relevant Chapter notes, the Tribunal analyzed the criteria for classification under 8471, emphasizing the exclusion of apparatus capable of use as a telephone from this category. The WCO guidelines on tablet computers were referenced, indicating that the dimensions of the imported goods were smaller than those specified for tablets, leading to a conclusion against classification under 8471.

6. Ultimately, the Tribunal found merit in the appellant's argument, supported by the export invoice classification under 8517 12 90, aligning with HSN. Consequently, the Tribunal set aside the Impugned order and allowed the appeal, ruling in favor of classifying the goods under 8517 as telephone sets for cellular networks.

7. The judgment was pronounced on 14.02.2017 by the Tribunal, comprising Shri Ashok Jindal, Member (Judicial), and Shri V. Padmanabhan, Member (Technical), with legal representation from both sides and detailed analysis of technical specifications, advertising claims, relevant Circulars, Chapter notes, and WCO guidelines to determine the appropriate classification of the imported goods.

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