9911796707
TMI Blog2023 (6) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... ting and faster processing time, air quality sensor, germ resistant screen, two touch pens (stylus), remote control, 70-80% glare free surfaces with a flicker free display, multi-touch interaction, handwriting recognition, freehand touch, go typing and applications such as calculator, stopwatch, buzzer. They are wall mounted, do not incorporating tilt, swivel or height adjustment mechanism and are available in dimensions 55 , 65 , 75 , 86 and 98 . They are used in classrooms for teaching and in companies for presentations, meetings etc. It is pertinent to mention that the principles for classification of goods are governed by the General Rules of Interpretation (GRI) and Harmonized Commodity Description and Coding System (Harmonized System or HSN). According to Rule 1 of the General Rules of Interpretation (GRI), titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes. - Chapter 8471 of Customs Tariff Act, 1975 covers, Automatic data processing machines and units thereof; magnetic or optical readers, machines for tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom heading 8471, even if they can be classified as part of an ADP system. Note 6(E) to chapter 84 mentions that a machine incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or failing that, in residual headings. In a standalone configuration, the devices under consideration process applications compatible with the various Android operating system join wired or wireless networks, access and manipulate folders and files, and perform general computing tasks such as Internet browsing, email, and editing office documents. Therefore, from the working and features of the impugned goods, it appears that these are neither units of ADP machines nor ADP machines presented in the form of systems, but ADP machines themselves. It is found that the subject goods are capable of performing plethora of functions independently on standalone basis and these devices are much more than mere display devices. In fact, display is only one of the features of the goods and cannot be construed to be its only function, much less its princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VIEWSONIC IFP7532 /75" INTERACTIVE DISPLAY SYSTEM 15 IFP7532-2 VIEWSONIC IFP7532-2 /75" INTERACTIVE DISPLAY SYSTEM 16 IFP7550 VIEWSONIC IFP7550 /75" INTERACTIVE DISPLAY SYSTEM 17 IFP7550-2 VIEWSONIC IFP7550-2 / 75" INTERACTIVE DISPLAY SYSTEM 18 IFP7550-3 VIEWSONIC IFP7550-3 / 75" INTERACTIVE DISPLAY SYSTEM 19 IFP7550-5 VIEWSONIC IFP7550-5 / 75" INTERACTIVE DISPLAY SYSTEM 20 IFP7552-1A VIEWSONIC IFP7552-1A / 75" INTERACTIVE DISPLAY SYSTEM 21 IFP7552-IB VIEWSONIC IFP7552-1B / 75" INTERACTIVE DISPLAY SYSTEM 22 VIEW BOARD 86" INTERACTIVE FLAT PANEL IFP8632-2 VIEWSONIC 1FP8632-2 / 86" INTERACTIVE DISPLAY SYSTEM 23 IFP8650 VIEWSONIC IFP8650 / 86" INTERACTIVE DISPLAY SYSTEM 24 IFP8650-2 VIEWSONIC IFP8650-2 / 86" INTERACTIVE DISPLAY SYSTEM 25 IFP8650-3 VIEWSONIC IFP8650-3 / 86" INTERACTIVE DISPLAY SYSTEM 26 IFP8650-5 VIEWSONIC IFP8650-5 / 86" INTERACTIVE DISPLAY SYSTEM 27 IFP8652-1A VIEWSONIC IFP8652-1A / 86" INTERACTIVE DISPLAY SYSTEM 28 IFP8652-1B VIEWSONIC IFP8652-1B / 86" INTERACTIVE DISPLAY SYSTEM 29 VIEW BOARD 98" INTERACTIVE FLAT PANEL IFP9850-3 VIEWSONIC IFP9850-3 / 98" INTERACTIVE DISPLAY SYSTEM 30 IFP9850-4 VIEWSONIC IFP9850-4 / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65", 75", 86" and 98" make it illogical and unviable for daily transit. Further, they have submitted that the ADP machines that comprise central processing unit, and an input and output unit (all within the same housing) are neither in the nature of a microcomputer (small or personal computer) nor in the nature of a large or main frame computer. Thus, it is contested that the subject goods are 'Automatic Data Processing Machines' classifiable under Chapter heading 8471 of Customs Tariff Act, 1975, specifically classifiable under the residual entry of sub heading 847141, that covers APDM "Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined". Relevant extracts from Chapter heading 8471 and Note 5(A) to Chapter 84 as submitted by the applicant is reproduced below: Tariff Item Description of Goods 8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included 8471 30 - Portable automatic data processing machines, weighing not more than 10 kg., consisting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessing machines" means machines, capable of: (1) storing the processing program or programs and at least the data immediately necessary for the execution of the program - The concerned goods have an in-built CPU, and an Android operating software. Thus, all the subject goods are machines which are capable of storing data or programs for the execution of programs. (2) being freely programmed in accordance with the requirements of the user- The subject goods come with a pre-installed operating system, namely, Android. It also has an OPS slot, that enables connection of additional hardware and installing other operating software such as Windows, etc. Thus with the use of either Android or other operating systems, new programmes can be download and installed in accordance with the need of the user. (3) performing arithmetical computations specified by the User-The subject goods are capable of performing arithmetical computations depending on the input as provided by the user. They are also equipped with a calculator to perform arithmetical computations. (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Customs (Imports), Mumbai II, Jawaharlal Nehru Custom House, Nhava Sheva, Tal Uran, District Raigad, Maharashtra-400707 2. The Principal Commissioner of Customs, Noida Customs Commissionerate, Concor complex, Greater Noida, Uttar Pradesh 201311. 3. The Commissioner of Customs, ICD Sabarmati, Kaligam Sabarmati, Ahmedabad 382470. 4. The Commissioner of Customs, Custom House 60, Rajajisalai, Chennai 600001. 5. Comments were invited from all the aforesaid jurisdictional Pr. Commissioner/ Commissioner of Customs. Comments on the merit of the question on which advance rulings is sought were received from the jurisdictional authority Commissioner of Customs, Chennai-II (Import) vide letter dated 04.05.2023, enclosing Annexures 'A' and 'B'. 'Annexure -A' provides comments on the maintainability of the application in view of case laws cited in the application and ' Annexure-B' provides comments with respect to the questions referred to in the application. Same is verbatim reproduced below: Annexure - A 1. The models referred by the applicant are 30 models of Interactive Display System (View Board) originating from the supplier View Sonic. As per the applicant, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r with NAC. In view of the above reasons, this Commissionerate of the considerable view that the classification of the said product i.e., Interactive Flat Panel is yet to attain finality. Annexure - B It is observed that from the grounds, description, specifications etc., given by the applicant, they are of the opinion that the goods under consideration, "Interactive Display Systems (View Board) - consisting of 30 models" being meets the requirements of Auto Data Processing Machine as defined in Note 6 (A) to Chapter 84 of the Customs Tariff Act, 1975, the same is falling under CTH 8471. Further regarding classification at sub-heading and 8 digit item level under CTH 8471, the applicant opined that as the CPU, memory, input and output device are inbuilt in the same housing it seems classifiable under CTSH 847141 and as it is not a micro-computer and large or main frame computer, the same appears to be classifiable under CTH 84714190. However, the contentions of the applicant appear incorrect in view of the followings: 1. The main heading of CTH 8471 covers "Automatic Data Processing Machines and Units thereof: Magnetic or Optical Readers, Machines for Transcribing Data onto D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pparatus. (E) Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings, 3. It is observed that an Interactive Flat-Panel Display (IFPD) is a large-format touchscreen display ideal for meeting rooms and collaborative spaces. It is a replacement for clunky or outdated projector technology with a higher-quality display, enhanced connectivity, and built-in software solutions. These solutions are perfect for business opportunities, educational pursuits, and even at home leisure. In a nutshell on IFPD-short for Interactive Flat Panel Display-it a type of interactive whiteboard (IWB). An IWB is a large electronic display that has a touchscreen and is able to access, manipulate, and interact with electronic files. They easily and beautifully handle the highly collaborative needs of today's office space with 20 points of touch and wide viewing angles with options for ultrafine 4K resolution and the ability to present a surprisingly natural handwriting experience. IFPDs support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pter 84 Note as mentioned above. 8. As per Rule 1 of the General Rules for the interpretation of the Harmonized System, the titles of Sections, Chapters and sub-chapters are provided for ease of reference only, for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the provision stipulated therein. 9. Further, Rule 3(a) states that the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. 10. The appropriate heading for classification of the impugned goods therefore shall be 8528 which covers - "Monitors and projectors, not incorporating television reception apparatus: reception apparatus for television, whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 365) ELT 353 (SC) held that the classification of product should be by applying common parlance test that the said product i.e., "Shampoo" is used as cosmetics only and not as Ayurvedic medicament even though the product has all the ingredients mentioned in books on Ayurveda listed in Drugs and Cosmetics Act. 15. In view of the above, the subject goods cannot be considered as an Automatic Data Processing machine under CTH 8471. It is pertinent to mention here that even Cellular Android Phones do incorporate all the functions of an ADP Machine and also works on Android OS, yet the same is classified under cellular phones as the primary function is communication. Applying the same analogy, the principle function of the item under import is to interact through display and hence the impugned goods are classifiable under subheading 8528 5900 which deals with other monitors. 16. In case of Commissioner of Customs (Import & General), New Delhi Vs Integral Computer Lid 2016 (337) ELT 580 (Tri-Del) dated 07.04.2016 the Hon'ble Tribunal has held that "Interactive Electronic White Board" is a teaching device mainly used for class room teaching or in conferences and meetings and work and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... typing and applications such as calculator, stopwatch, buzzer. They are wall mounted, do not incorporating tilt, swivel or height adjustment mechanism and are available in dimensions 55", 65", 75", 86" and 98". They are used in classrooms for teaching and in companies for presentations, meetings etc. Further, these Interactive Display Systems can also be connected to laptops and input can be given either from the Interactive Display Systems to the laptop or vice versa. Internet can be accessed by connecting them to a dongle via USB ports or by the use of a LAN cable. They allow user to record and share lectures/ notes/ presentations via email or QR codes and upload the notes on a pre-set cloud storage. The subject goods for which advance ruling has been sought, its characteristics, functionality and utility etc. are broadly discussed in the aforementioned paras. The issue involved is whether the impugned goods, namely, Interactive Display System (ViewBoard) can be considered as ADP machines and can merit classification under sub heading 84714190 of Customs Tariff Act, 1975. 7.1. The Jurisdictional authority. Commissioner of Customs, Chennai-II (Import), has categorically stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued, or that they have given adverse comments in respect of another pending Advance Ruling is not of relevance, because there are now numerous Advance Rulings on identical issue, which have not been challenged. Thus the issue has attained finality. Inputs on Annexure-B 1. It is submitted that the applicant has clearly set out detailed submissions in its Advance Ruling Application regarding the fact that the subject goods fulfil all conditions mentioned in Note 5(A) to Chapter 84 of the Customs Tariff, and therefore, qualify to be considered as Automatic Data Processing Machines classifiable under Heading 8471. It is not being contended by the Chennai Commissionerate that the goods concerned do not fulfil the conditions set out in Note 5(A). Given the same, the goods are rightly classifiable under Heading 8471. 2. It is instead being contended in Annexure-B that the product in question is a multifunction machine (performing the functions of an ADPM and display), and the display function is the primary function. Thus, reliance is being placed by the Chennai Commissionerate on Section Note 3 to Section XVI, which pertains to classification of multi-function machine, to contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-quality display, enhanced connectivity, and built-in software solutions; that in a nutshell it is a type of interactive whiteboard whose main function is interaction through display; that the subject goods are not merely an ADPM and in fact it has many other additional inbuilt features with the main purpose to interact through display; that they are mainly display devices incoiporating and working in conjunction with an automatic data processing machine i.e. inbuilt CPU; that the primary function of the goods is to display the given input data/images/pictures/videos etc. They have placed emphasis on the following Chapter Notes of Chapter 84 i. Note 6(D) to Chapter 84, that categorically states that, "Heading 8471 does not cover 'monitors and projectors, not incorporating television reception apparatus' when presented separately", ii. Note 6 (E) of Chapter 84 that states "Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or failing that, in residual headings." and iii. Chapter Note 3 to Section X ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nput is either automatic through the use of data media such as magnetic tapes or manual by means of keyboards, touchscreen etc. The input data are converted by the input units into signals which can be used by the machine and stored in the storage units. The data is then operated by the CPU and operating system to produce output. From para 2, it is evident that these machines have an in-built CPU, Android operating software and high internal storage capability which is directly accessible for the execution of a particular program and which has a capacity sufficient to store those parts of the processing & translating programs and the data immediately necessary for the current processing run. Therefore, the goods satisfy the condition specified in Note 6(A)(i). As per Note 6(A)(ii), the machine should be able to be freely programmed in accordance with the requirement of the user. From the product details submitted, it appears that these goods come with a pre-installed operating system, namely, Android, that is the customized operating system for these device. It has an OPS slot, enabling connection of additional hardware and installing other operating software such as Windows, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... least a central processing unit, a keyboard and a display 2nd one-dash subheading: Other automatic data processing machines As the machines under consideration do not have a keyboard, they appear to be classifiable as other ADP machines under 2nd one-dash subheading. Subheading 847141 covers other ADP machines; comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined. For the machines under consideration, the LED screen satisfies the requirement for output and the touchscreen satisfies the requirement for input apart from the CPU inbuilt into the device. Therefore, the subject goods appear to be classifiable under subheading 847141 and more specifically under subheading 84714190 as "Other automatic data processing machines: Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: Other". 9. The jurisdictional Commissionerate, Chennai Import -II have contended against applicant's request to classify the subject goods under Chapter heading 8471 and have submitted that the appropriate heading for classification of impugned goods shall be Chapter heading 85 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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