2024 (3) TMI 505 - AAR - Customs

Classification of goods proposed to be imported - Optoma Creative Touch 5-series Interactive Flat Panel (IFP) (Model- 5652RK , 5752RK 5862RK ) - to be classified under sub-heading 8471 41 90 or not - HELD THAT - On perusal of the comments of the concerned Commissionerate on the application for advance ruling, it is observed that the word, Display in the description of item, interactive Flat Panel Display, has caught their attention and same has been made basis to arrive at essential/principle function of the subject goods however, it appears that importance of the word, Interactive in the description of the subject goods, has not been discussed much. The word, Interactive , in the description of the subject goods immediately brings to the front various capabilities of the subject goods and on closer examination, the capabilities of the subject goods meet the requirement under Chapter Note 6(A) of Chapter 84 for a machine to mean as automatic data processing machine . Moreover, once an item has inbuilt input unit, output unit along with processing unit then it is obvious that the item can perform multiple functions. For such an item similar to the subject goods, the issue is to ascertain essential function and terms of the heading read with Section/Chapter Notes for determination of classification of such goods. The issue of classification, in the instant application gets settled in terms of Rule 1 and Rule 6 of General Rules for Interpretation of Import Tariff (GRI) without inviting reference to Rule 3 of GRI. Since the question under the application for advance ruling relates to classification of goods proposed to be imported, guidance of the World Customs Organization, to which India is a signatory, would be useful - The HS Committee of WCO decided the classification of this product under sub-heading 8471.60, adopting the classification rationale under General Rules for Interpretation vide Rule 1 read with Note 5(C) to Chapter 84 and Rule 6 of GRI. It is noted that a number of rulings and judgments have been quoted by the concerned Commissioner to justify classification under Heading 8528. However, it is felt that judgment of CESTAT, New Delhi in the case of M/S. INGRAM MICRO INDIA PRIVATE LIMITED VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS (IMPORT) , NEW DELHI 2022 (2) TMI 308 - CESTAT NEW DELHI is the most appropriate, giving detailed explanation for classification of goods similar to the subject goods under Heading 8471 It is also noted that Customs Authority for Advance Rulings, Mumbai examined the question of classification of similar goods and ruled for classification of such goods similar to the subject goods in sub-heading 8471 41 90, while referring to the Final Order of Hon ble CESTAT, New Delhi in an appeal filed by M/s. Ingram Micro India Pvt. Ltd. Thus, it is evident that the proposed items of import namely, Optoma Creative Touch 5-series Interactive Flat Panel (IFP) (Model-5652RK , 5752RK 5862RK V merit classification under sub-heading 8471 41 90 of the First Schedule to the Customs Tariff Act, 1975.

Summary

Issues Involved:
1. Classification of the proposed items of import: "Optoma Creative Touch 5-series Interactive Flat Panel (IFP)" under the Customs Tariff.

Summary:

Issue 1: Classification of the Proposed Items of Import

Applicant's Position:
- The applicant, M/s. Supertron Electronics Pvt. Ltd., sought an advance ruling on the classification of "Optoma Creative Touch 5-series Interactive Flat Panel (IFP)" under sub-heading 8471 41 90.
- They argued that the subject goods are an All-in-One (AIO) computer system with an integrated system including a CPU, motherboard, graphics card, memory, and storage, functioning like a large tablet computer.
- The subject goods have extensive connectivity and are capable of functioning on multiple operating systems including Android, Windows, Mac, and Chrome OS.
- The applicant cited previous rulings and decisions supporting the classification of similar goods under sub-heading 8471 41 90.

Department's Position:
- The concerned Commissioner of Customs, Chennai, argued that the subject goods should be classified under Heading 8528, as they are primarily display devices with additional features, not merely ADP machines.
- They contended that the goods are interactive flat-panel displays used for various purposes like training, conferences, and educational purposes, and their primary function is display.
- The department referred to Chapter Note 6(D) and (E) of Chapter 84, which exclude monitors and projectors not incorporating television reception apparatus from Heading 8471.

Authority's Analysis:
- The Authority noted that the applicant's reference to Chapter Note 5 should be treated as Chapter Note 6 due to changes in the Chapter Notes of Chapter 84.
- The subject goods meet the requirements of an automatic data processing machine as per Note 6(A) of Chapter 84, including storing programs, being freely programmable, performing arithmetical computations, and executing processing programs without human intervention.
- The Authority emphasized the importance of the word "Interactive" in the description of the subject goods, which indicates multiple capabilities beyond mere display functions.
- The World Customs Organization's guidance and previous rulings by Customs Authority for Advance Rulings, Mumbai, supported the classification of similar goods under sub-heading 8471 41 90.

Conclusion:
- The proposed items of import, "Optoma Creative Touch 5-series Interactive Flat Panel (IFP)" (Model-5652RK+, 5752RK+, and 5862RK+), merit classification under sub-heading 8471 41 90 of the First Schedule to the Customs Tariff Act, 1975.
- The Authority ruled accordingly.