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TMI Blog2023 (6) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... aratus of Chapter heading 8512 or 8530. CTH 8531 clearly provides that this heading provides for classification of all products of electrical apparatus used for signalling purposes, whether using sound for the transmission of the signal (bells, buzzers, hooters, etc. or using visual indication (lamps, flaps, illuminated numbers, etc.), and whether operated by hand (e.g.; door bells) or automatically (e.g., burglar alarms) with the exception of signalling apparatus used on cycles or motor vehicles (heading 85.12). And precisely due to this exclusion, it is found that the impugned goods do not merit classification under CTH 8531. Impugned good covered under present CAAR-1 application perform signalling function in both ways i.e. by visual mode and also by sound mode. There is no single eight-digit classification which can accommodate an apparatus or an equipment performing both visual as well as sound signalling function under the first schedule of the Customs Tariff Act, 1975 - Rule 3(b) of the GRI comes in to operation only if Rule 3(a) thereof fail and if both Rule 3(a) and Rule 3(b) fail, Rule 3(c) thereof will apply. Thus, the order of priority for deciding the classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unted on inside of windshield behind rear-view mirror of the vehicle, which plays a critical role in correct functioning of entire system and constantly scans road ahead, mapping objects within vision range, and using complex algorithms for identifying, and labelling them accordingly e.g., vehicles, traffic and lane signals, pedestrians, trees, etc. Camera unit also includes a speaker which provide audio alerts when, based on road scanning and mapping, Mobileye Connect identifies a risk and triggers a sound alert, which is complementary to main function i.e., surveying, mapping and road scanning functionality. 2.2 The applicant further submitted that in addition to forward-facing camera, Mobileye Connect includes a GPS unit, which works in a way to determine location of images on the map grid, and also include Eye watch display for visual alerts, which is mounted in the bottom corner of windshield. The applicant submits that while all three i.e., camera unit, display unit and GPS unit are separately classifiable on standalone basis on merit under CTA, but when put together the combined system performs specified function of surveying and scanning the road ahead, mapping objects a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or accessories do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part or accessory. 3.2.1 Heading 8708 of the Customs Tariff covers 'Parts and accessories of motor vehicles of headings 8701 to 8705' and enlist specified parts of motor vehicles therein wherein surveying instrument is neither mentioned nor can be covered therein, which are specifically covered in Heading 9015 thereof and not used solely and principally with motor vehicles. Also, note 2(f) and Note 2(g) of Section XVII of the Customs Tariff specifically exclude articles of Chapter 85 and Chapter 90 thereof, respectively. 3.2.2 In terms of Section Note 2 to Section XVII of CTA, the expression parts and accessories will not apply to article interalia falling under Chapter 90, whether or not such article is identifiable as for goods of Section XVII. Therefore, article falling under Chapter 90 are specifically excluded from being classified under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanatory Notes to Chapter 90 of HSN reads: General (I) General Content and Arrangement of the Chapter This Chapter covers a wide variety of instruments and apparatus which are, as a rule, characterized by their high finish and high precision. Most of them are used mainly for scientific purposes (laboratory research work, analysis, astronomy, etc.), for specialised technical or industrial purposes (measuring or checking, observation, etc.) or for medical purposes. The Chapter includes in particular: (A)... (B) Instruments and apparatus designed for certain specifically defined uses (surveying, meteorology, drawing, calculating, etc.). . Some of these instruments are specified in certain headings, for example, other instruments and apparatus are covered by more general descriptions in headings which refer to a particular science, industry, etc. (e.g., astronomical instruments of heading 90.05, surveying instruments and appliances of heading 90.15, ) . 3.3.5 Explanatory Note to Chapter 90 of HSN provide that Chapter 90 thereof include instrument and apparatus designed for specifically defined uses i.e., surveying, which also clarifies that some o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation in respect of shape, size and co-ordinates of objects in the image or photographs, process the same with proprietary algorithm/ software and alert driver; and surveying function is constantly performed by camera unit and based on results of surveying function, and other components trigger visual and sound signalling function, as delivery of output of primary function. Hence, in terms of Note 3 to Chapter read with Note 4 of Section XVI, Mobileye Connect is to be classified based on its principal function of surveying. Further, in support of this argument, the applicant placed reliance on Supreme Court decision in Atul Glass Industries Limited Vs. CCE [1986 (25) ELT 473 (SC)]; OK Play (India) Limited vs. CCE [ 2005 (180) ELT 300 (SC)]; Holostick India Limited vs. CCE [2015 (318) ELT 529 (SC)] and Logic India Trading co. vs. CC [ 2016(337) ELT 65 (Tri.)], affirmed by Hon'ble Supreme Court. 3.3.10 On the basis of functional test, above submissions and various other arguments and case law cited in the statement of interpretation to the present application, the applicant submits that Mobileye Connect is classifiable under Heading 9015 of Customs Tariff Act, 1975. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or photographs, process the same with proprietary software and alert the driver; and surveying function is constantly performed by Camera Unit and based on results of surveying function, other components trigger visual and/ or sound signalling function. The applicant submits that the subject goods are presently used as collision avoidance system in vehicles. The applicant had earlier imported 100 units and 20 units of Mobileye Connect from Mobileye Vision Technologies Limited, Israel, by classifying under CTH 9015 4000 of CTA vide Bill of Entry Nos. 2143538 dated August 24, 2022 and 2393735 dated September 12, 2022, which applicant believes is correct classification. However, to avoid disputes in case of future imports applicant has sought ruling on classification of the subject goods under the CTA basing its arguments on the test of functionality. 4.2 Applicant has submitted comprehensive submissions which include Section notes, Chapter notes, descriptions of multiple contending CTHs and relevant HSN Explanatory notes explaining the scope of CTH 8512, Chapter 87 and CTH 9015. Comments from the jurisdictional Principal Commissioner/Commissioner of Customs, Airport and Air Carg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned equipment as described in the said rulings are similar to the impugned goods. 4.4 The US cross rulings e.g., N282922, N282920 and N282926 submitted by the applicant are evidently for classification of a specific item, namely (i) Leddar M16-L sensor module, (ii) Leddar Vu8 sensor module and (iii) Leddar M16 sensor module from Canada, respectively. The said products, are described and identified as optical LED sensor module which are suitable for a number of applications, including collision avoidance system in semi-autonomous and autonomous vehicles, machine safety and automation, they are fundamentally LiDAR sensors and have been classified under HTSUS 9015.80.2000. 4.5 FAQ sheet of the product Mobileye 8 connect is available wherein the working of the product has been explained. It is also explained that Mobileye 8 Connect is an alert system only, and does not intervene in vehicle operation . Further, it is claimed that the Mobileye 8 Connect provides the following five alerts: a. Forward Collision Warnings (FCW) - FCW warns drivers of an imminent rear-end collision with a car, truck, or motorcycle ahead. b. Headway Monitoring Warning (HMW) -HMW helps drive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same heading (including a machine, instrument or apparatus of heading 90.10, 90.13 or 90.31) are to be classified with the machines, instruments or apparatus of that kind; (c) All other parts and accessories are to be classified in heading 90.33. 4.6.2 On comparing the functions of Photogrammetrical Instruments and Appliances as provided in Explanatory Note (Il) to Heading 9015 of HSN with the functionality of Mobileye Connect, I find that the same is claimed as identical to a Photogrammetrical Surveying Instrument, wherein the camera unit takes digital images from multiple view-points of the view ahead and with complex proprietary algorithm processes the same to give information to display unit and alerts the driver through speaker. The camera unit, as mentioned in the application, is one of the units of the subject goods which is placed on the top of windscreen behind the rear-view mirror of the vehicle. The Mobileye Connect employs a single camera to capture photograph/image and utilizes the same for further processing. HS Explanatory Note (Il) to Section XVIII covers Photogrammetrical instruments and appliances. It is provided that these are mainly used for plotting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Porritts Spencer (Asia) Ltd. Vs. State of Haryana [1983 (13) E.L.T. 1607 (S.C.)] observed as Taxing Statute Words and expressions to be interpreted in ordinary sense in preference to scientific or technical meaning. - Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is the latter sense that in a taxing statute the word must have been used unless contrary intention is clearly expressed by the legislature. [para 5] 5.2 In the case of Holostick India Limited vs. CCE [2015 (318) ELT 529 (SC)], it was observed that It is important to remember therefore, that the primary use of the product is security and not the quality of being adhesive. Here again, a simple example will suffice. Take an adhesive tape with a monogram printed upon it. The primary use of such tape is by virtue of its adhesiveness to bind and package containers in which goods are to be stored and transported. Obviously, in such an example, the printed monogram of such adhesive tape would be incidental to the primary use of the said goods - the adhesive tape. By way of contrast, in the present case, the factor of adhesiveness i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. 5.- For the purposes of these Notes, the expression machine means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85. 6.1 Chapter Heading 8531 of CTA provides as follows: Electric sound or visual signalling apparatus (for example, bells, sirens, indicator panels, Burglar or fire alarms), other than those of Heading 8512 or 8530. 8531 10 ---Burglar or fire alarms and similar apparatus: 8531 10 10 ---Burglar alarm 8531 10 20 ---Fire alarm 8531 10 90 -- Other 8531 20 00 ---Indicator panels incorporating liquid crystal devices (LCD) or light emitting diodes (LED) 8531 80 00 --- Other apparatus With the exception of signalling apparatus used on cycles or motor vehicles (heading 85.12) and that for traffic control on roads, railways, etc. (heading 85.30), this heading covers all electrical apparatus used for signalling purposes, whether using sound for the transmission of the signal (bells, buzzers, hooters, etc. or using visual indication (lamps, flaps, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnect. Applicant has tried to classify the goods on the basis of input mechanism, photogrammetrical surveying, rather than the output, an alert system for a vehicle driver, and by the manufacturer's own admission, discussed in para 4.5 above, these goods perform the function of generating five different alerts for the users of the goods- vehicle drivers. 7.2 As seen earlier the Chapter heading 8531 of CTA excludes from its purview Electric sound or visual signalling apparatus of Chapter heading 8512 or 8530. CTH 8531 clearly provides that this heading provides for classification of all products of electrical apparatus used for signalling purposes, whether using sound for the transmission of the signal (bells, buzzers, hooters, etc. or using visual indication (lamps, flaps, illuminated numbers, etc.), and whether operated by hand (e.g.; door bells) or automatically (e.g., burglar alarms) with the exception of signalling apparatus used on cycles or motor vehicles (heading 85.12). And precisely due to this exclusion, I find that the impugned goods do not merit classification under CTH 8531. Further, based on HSN explanatory notes to Section XVI, it can be safely inferred that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 7.4 Accordingly, Rule 3(b) of the GRI comes in to operation only if Rule 3(a) thereof fail and if both Rule 3(a) and Rule 3(b) fail, Rule 3(c) thereof will apply. Thus, the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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