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TMI Blog2021 (8) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... e w.e.f. as it states that the expression unmanned aircraft means any aircraft, other than those of heading 8801, designed to be flown without a pilot on board. Tello drones with or without camera would merit classification under heading 9503 of the first schedule to the Customs Tariff Act, 1975 and would attract basic customs duty @ 60% adv IGST @ 18%, Social Welfare Surcharge @ 6% - Both AGRAS T 16 and Mavic 2 drones would merit classification under heading 8802 of the first schedule to the Customs Tariff Act, 1975 and would attract basic customs duty @ 10%, IGST @ 5%, and Social Welfare Cess @ 1%. However, if any import is made for personal use, the rate of IGST would be 28% and it would also attract a GST compensation cess. Application disposed off. - CAAR/Mum/ARC/15/2021 In Application No. CAAR/Mum/ARC/13/2021 - - - Dated:- 25-6-2021 - M.R. MOHANTY CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAI Present for the application : Sri T. Viswanathan (Advocate) Ms. Srinidhi Ganesan (Advocate) Mr. Blas D Souza Mr. Santhana Gopalan; Ms. Kiran Agrawal Present for the Department Sh. Leo John Ilango, Joint Commissioner, ACC, Meenambakkam, Chennai; Ruling M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnish the relevant records: Provided that where any records have been called for by the Authority in any ease, such records shall, as soon as possible, be returned to the Principal Commissioner of Customs or Commissioner of Customs. Further, clause (c) to the sub-section (1) of section 28J of the Act lays down that an advance ruling pronounced under section 28-I would be binding, among others, on the Principal Commissioner of Customs or Commissioner of Customs, and the customs authorities subordinate to him, in respect of the applicant. Further, section 28KA read with regulation 9 mandates that the Principal Commissioner or the Commissioner is authorised to file an appeal against an advance ruling. The import of reading all the legal provisions cited above together leads one to the inescapable conclusion that the scheme of advance rulings in customs, as contained in the Chapter VB of the Act, envisages that an applicant would indicate only one port/point of entry for their proposed activity. The use of definite article the in all these legal provisions also point to the intention of the legislature to define a specific individual and not indulge in a generic descr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal specifications and special characteristics, as stated by the applicant, are as under: - (a) Tello drone, with/without camera, is primarily aimed at providing an entertaining learning experience to children and adults alike. The model incorporating camera has the ability to transmit visuals to the user on the remote-controlled device, when in flight. Users can learn the basics of programming while using the product. This drone has 4 rotors and weighs 87 grams. It can achieve a height of 15 metres and travel distances up to 100 metres and remain airborne for 13 minutes. Under the CAR norms, these types of drones are categorised as Nano . (b) Agricultural drone is used to carry and spray agricultural products over wide areas, It is equipped with Radar and 3D mapping systems, which help calibrate the device during flight and demarcate the area to be covered. Besides, the Radar and 3D mapping features enable the user to fly the drones in low light or low visibility conditions. AGRAS T 16 drones are equipped with six rotors, have an unladen weight of 39.5 kgs., can achieve a height of 30 metres, remain airborne for 10 minutes and cover distances up to 3 kms. These types o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout a pilot, controlled from the ground, used for taking photographs, dropping bombs, delivering goods, etc.; a remote-controlled pilotless aircraft or missile. Considering the characteristics of drones, e.g., the ability to fly, take off vertically from the ground and land in a similar manner, the ability to hover in the air, presence of rotors for providing lift etc., drones are more akin to helicopters or choppers. In fact, one wouldn t be too far amiss in saying that drones are nothing but miniature helicopters. Various dictionaries describe helicopters as, an aircraft without wings that has large blades on top that go round. It can fly straight up from the ground and can also stay in one position in the air; a type of aircraft without wings, that has one or two sets of large blades that go round very fast on top. It can land and take off vertically and can stay in one place in the air; an aircraft with long blades on top that go round very fast. It is able to stay still in the air and to move straight upwards or downwards; an aircraft whose lift is derived from the aerodynamic forces acting on one or more powered rotors turning about substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... musement purposes (heading 9503). Sub-heading Notes: 1. For the purposes of sub-headings 8802 11 to 8802 40, the expression unladen weight means the weight of the machine in normal flying order, excluding the weight of the crew and of fuel and equipment other than permanently fitted items of equipment. 2. For the purposes of sub-headings 8806 21 to 8806 24 and 8806 91 to 8806 94, the expression maximum take-off weight means the maximum weight of the machine in normal flying order, at takeoff, including the weight of payload, equipment and fuel. , (ii) in heading 8802, in the entry in column (2) occurring against the heading 8802, for the word AIRCRFT , the words AIRCRAFT, EXCEPT UNMANNED AIRCRAFT OF HEADING 8806 shall be substituted; (iii) heading 8803, tariff items 8803 10 00 to 8803 90 00 and the entries relating thereto shall be omitted; (iv) after tariff item 8805 29 00 and the entries relating thereto, the following shall be inserted, namely:- 8806 UNMANNED AIRCRAFT 8806 10 00 - Designed for the carriage of passengers - Other, for remote-controlled flight only: 8806 21 00 - - With maximum take-off weight not more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om authoritative dictionaries, documents showing drones to be helicopters as held by NASA and EU in the application for advance rulings. 9. I have perused all the material on record, including the written and oral submissions of the applicant. Classification of goods for customs purposes follow a set of general rules. The very first rule of the General Rules for Interpretation lays down that the titles of sections, chapters and sub-chapters are provided for ease of reference only, and that, for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes provided such headings or notes do not otherwise require. I intend to apply this rule to each of the three drones under consideration in the present proceedings and consider the subsequent rules, only if necessary. (i) Tello drones, as per the product description, specifications, and the product catalogue, is a lightweight machine with limited flying capability and is clearly intended for amusement and educational purposes. This drone is aimed at amateurs, both children and adults, and therefore, the tariff entry 88021100 meant for helicopters of an unlad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alogue, are equipped with powerful cameras with zooming capability and are capable of still as well as video recording facilities. It is clear that the main function of this machine is aerial photography/video photography. Therefore, the issue that arise in this case is whether the product merits classification under heading 8525 under the category of television cameras, digital cameras and video camera recorders or under heading 8802 as helicopters. The relevant portions of the explanatory notes reproduced above is categorical that helicopters falling under heading 8802 can be intended for use in aerial photography. However, the applicant, in the paragraphs 4.24 and 4.25 of their application, has fairly stated that the Harmonised System Committee of the World Customs Organisation in their 55th Session of the Classification Decisions, opined that a camera mounted on a quadcopter(drone merits classification under tariff entry 8525.80 as a camera on the ground that the essential feature of the product to be photography/videography and not flying. Obviously, in coming to the above conclusion reliance was placed on GIR 3(b) Mixtures, composite goods consisting of different mate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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