2024 (1) TMI 468 - AT - Customs

Classification of imported goods - Crossmatch L Scan Guardian F LSE - parts of Automatic Data Processing Machines and accordingly classified items under Chapter Heading 8471 6050 or the goods are fingerprint reader under CTH 8543? - HELD THAT - The issue has already been considered by this Tribunal taking note of the various aspects on the issue - This Bench in the case of CC vs. Kronos Systems India Pvt. Ltd. 2023 (10) TMI 1006 - CESTAT BANGLORE has held Since the specific function of the imported item is to mark attendance or to take note of the persons of the employees for the purpose of attendance or payroll or leave, they cannot be classified under Chapter 84 as it excludes from this Chapter as per the Chapter Note 5(e). In a similar set of facts in the case of Enterprise Software Solutions Lab vs. CC 2023 (12) TMI 1112 - CESTAT BANGLORE , the products were classified under CTH 8543. Thus, the product in question merits classification under CTH 8543 instead of CTH 8471 as claimed by the respondent - appeal filed by Revenue allowed.

Summary

Issues involved: Classification of imported item 'Crossmatch L Scan Guardian F LSE' as part of computers under Chapter Heading 8471 6050 or under residual heading 8543 7099.

Classification under Chapter Heading 8471 6050:
The respondent claimed the item to be parts of Automatic Data Processing Machines under Chapter Heading 8471 6050. However, upon examination of samples, operation manual, and catalogue, it was found that the item functions as a fingerprint reader and not as a part or accessory of the computer. The Commissioner (A) held that the item is used to identify individuals via their fingerprints and cannot be considered a multipurpose scanner. The item is an instrument used to identify the person/employee.

Revenue's appeal - Classification under residual heading 8543 7099:
The Revenue contended that the item is not a data processing machine or any part of it, but a biometric reader that reads the user's fingerprint. The Fingerprint reader is distinct from document scanners covered under CTH 8471 6050. The Revenue argued that by virtue of Chapter Note 5(E) to Chapter 84, such devices should be classified under residual heading 8543 7099 as they are not specifically covered elsewhere. The item is sold as a fingerprint reader and not as part or accessory of the computer.

Tribunal's decision - Classification under residual heading 8543:
The Tribunal considered previous decisions and noted that the imported item functions as a data collection device for marking attendance or taking note of employees, akin to proximity readers classified under Chapter Heading 8543. The Tribunal cited Chapter Note 5(E) to Chapter 84, stating that machines performing a specific function other than data processing are to be classified in headings appropriate to their functions or in residual headings. Following previous rulings, the Tribunal classified the product under CTH 8543 instead of CTH 8471 as claimed by the respondent.

Conclusion:
The impugned order was set aside, and the appeal filed by the Revenue was allowed. The product 'Crossmatch L Scan Guardian F LSE' was classified under residual heading 8543 7099 instead of Chapter Heading 8471 6050 as claimed by the respondent.