9911796707
TMI Blog2023 (10) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... headings. As the impugned devices, as described by the applicant, appear to be akin to ADP machines performing capturing of data and its further processing, Notes 6(D) and 6(E) do not appear to have application in this case. In respect of possible alternate Heading 8517, there is a need to examine the features of these devices in the context of Note 3 to Section XVI of the Tariff. Heading 8517 covers, Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of Heading 84.43, 85.25, 85.27 or 85.28 - As the devices also have communication capabilities, including cellular connectivity in 18 out of 36 devices, the classification under Heading 8517 needs to be examined. In the instant case, these devices combine computing and scanning functions for monitoring deliveries, tracking assets, and managing inventory. 18 out of 36 devices also have communication capabilities. However, for the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... USTOMS Shri T. Viswanathan, Dhananjay Sethuraj, Advocates, Sushant Acharya and Ms. Riya Sinha, for the Assessee. RULING M/s. Senate Solutions Private Limited (hereinafter referred to as the applicant ) filed four applications for advance ruling before the Customs Authority for Advance Ruling, Mumbai (CAAR). The said applications, along with enclosures, were received in the Secretariat of CAAR, Mumbai on 3-1-2023, in terms of Section 28H(1) of the Customs Act, 1962 (hereinafter referred to as the Act ). The applicant is seeking advance rulings on the classification of Portable Computers viz. Barcode Mobile Computers, RFID Mobile Computer and Tablet Mobile Computer. The models proposed to be imported under each category are as follows : Sr. No. Device Category Mobile Computer Models Wireless Connectivity Options Does Product have Cellular calling function 1 Barcode Mobile Computers Newland NLS-MT37H Device with SIM Card Wi-Fi YES Wi-Fi Only Device NO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... YES Wi-Fi Only Device NO 15 Tablet Mobile Computer Speedata SD80 Tablet Device with SIM Card Wi-Fi YES Wi-Fi Only Device NO 16 Speedata SD100 Tablet Device with SIM Card Wi-Fi YES Wi-Fi Only Device NO 17 Newland NLS-CL-M10 Device with SIM Card Wi-Fi YES Wi-Fi Only Device NO 18 Speedata SD55MD Device with SIM Card Wi-Fi YES Wi-Fi Only Device NO 2. The applicant a private limited company, is engaged in the business of IT solutions with a prime focus in the field of IT support services. They intend to import Portable Computers from the Supplier, viz., Newland Taiwan Inc. to be sold further to their distributors/consumers. It is submitted that the Portable Computers are handheld/wearable/vehic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinary reliability, no matter the orientation of the tag. Tablet Mobile Computer (Tablet with displays larger than the above 2 categories of Portable computer) Handheld computers - for undertaking processing and communication activities in sensitive areas It is stated that each type of portable computer is available with SIM, as well as without SIM connectivity. Communication functions, if any, are generally performed by the Portable Computers using Wi-Fi or wired connectivity. Only when such wireless internet is not available, the devices use cellular network to function (if devices have Sim Card capability and have been fitted with the Sim Card). Thus, cellular network is used only rarely in cases such as during last mile delivery, when Wi-Fi is not readily available etc. In fact, calling function provided in Products with SIM is purely a supplementary function since the same has been provided as an additional mode of connectivity apart from Bluetooth, Wi-Fi and GPS. 2.1 The applicant has submitted that the portable computers proposed to be imported by them are classifiable under Heading 8471 as Automatic Data Processing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in order to cater to variety of user needs. iv. Executing, without human intervention, a processing program which requires them to mod their execution, by logical decision during the processing run. The Portable Computers while performing tasks like scanning, asset/inventory management/invoicing are essentially functioning without manual intervention on the basis of pre-programed logical sequence of operations As per the applicant s contention, Chapter Notes 6(D) and 6(B) read with Note 6(C) are not applicable to the impugned devices as the products are in itself ADP machines. Thus, the proposed imports satisfy all the conditions to be fulfilled by ADP machines. 2.3 The applicant further stated that without prejudice, even if it is assumed that these devices viz. Barcode Mobile Computers, RFID Mobile Computer and Tablet Mobile Computer models proposed to be imported are capable of performing more than one function, i.e., capable of functioning other than as an ADP machine, the function of the ADP machine is the principal function and therefore, shall be treated as an ADP machine in terms of Note 3 to Section XVI. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar connectivity, identical models are available both with and without cellular connectivity options. Thus showing that SIM is not an integral part of theses device. The way the proposed imports are built, it is evident that it is meant for rugged use and is not sleek or delicate like smartphones available in a similar price range. The proposed imports also don t have most of the features which are there in smartphones of a similar price range. Furthermore, smartphones of the same price range like the price range of the impugned product are marketed as luxury items for personal use whereas these products are used purely for industrial/trade activities and not as luxury items. Their designs are not sleek or sophisticated like that of smartphones and are rather designed to be used in arduous environments and are made to withstand harsh environments. 2.5 In support of their contention, the applicant submitted Circular No. 20/2013, dated 14-5-2013 wherein the Board analysed the functions of a Tablet Computer and held that its principal function is that of a Computer, and communication (even using SIM) is merely incidental. It was further held that the difference between a smartph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports are portable computers and not merely RFID readers. (c) The ruling on tablet computers is more appropriately applied to the proposed imports. (d) Heading 84.71 has not at all been considered by the WCO in their ruling. 2.8 In relation to the above-mentioned device, the questions on which advance rulings have been sought are as follows :- (a) Whether portable computers, viz., Barcode Mobile Computers, RFID Mobile Computer and Tablet Mobile Computer to be imported by the applicant are classifiable under the Tariff Item 8471 30 90 of the Tariff of India? (b) If the answer to the above question is negative, then what would be the correct classification of the portable computers, viz., Barcode Mobile Computers, RFID Mobile Computer and Tablet Mobile Computer under the Tariff of India? 3. The applicant in their CAAR-1 form declared that they intend to import the impugned devices from the following places : (a) The Commissioner of Customs (Imports), Nhava Sheva-V, Jawaharlal Nehru Custom House, Nhava Sheva, Tal Uran, District Raigad, Maharashtra-400707 (b) The Commissioner of Customs, Chennai-II (Import) Custom House, 60, Rajaji Salai, Chennai-600001. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputer and Tablet Mobile Computer. These are handheld/wearable/vehicle mountable portable devices used in enterprise environments to run mobile apps, capture barcodes, take photos and videos, and provide voice and data communications for workers and managers. These devices combine personal computer and scanning functions in a single wireless device that can be outfitted with off-the shelf or custom software applications that perform everyday tasks such as monitoring deliveries, tracking assets, and managing inventory. Because they run on familiar operating systems such as Windows/Android, they offer the same functionality as a desktop computer or laptop. These processors are also equipped with a barcode scan engine and act as their own host, which means one can instantly update and edit information as it is captured. The applicant has suggested Customs Tariff Heading 8471 as an appropriate classification for these devices. 5.1 General Rules of Interpretation (GRI) 1 of the Customs Tariff Act, 1975 provides that the classification of goods shall be determined according to the terms of the headings and any relative section or chapter notes. In the event that the goods cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (D) to Chapter 84 lists certain separately presented products that are to be excluded from Heading 8471 , even if they can be classified as part of an ADP system. Note 6(f) 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. As the impugned devices, as described by the applicant, appear to be akin to ADP machines performing capturing of data and its further processing, Notes 6(D) and 6(E) do not appear to have application in this case. 5.2 In respect of possible alternate Heading 8517, there is a need to examine the features of these devices in the context of Note 3 to Section XVI of the Tariff. Heading 8517 covers, Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal function of the impugned devices is barcode scanning and data processing for monitoring deliveries, tracking assets and managing inventory. Therefore, these devices appear to merit classification under Heading 8471 and not under Heading 8517. 5.3 In regards to the classification opinion of the 68th session of the Harmonized System Committee, it is observed that the committee has classified RFID/barcode readers with a mobile operating system capable of scanning and cellular connectivity under sub-heading 8517 13. This sub-heading covers smartphones. Note 5 to Chapter 85 states that For the purposes of Heading 85.17, the term smartphones means telephones for cellular networks, equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems . The note clearly states that these devices are telephones for cellular networks designed to perform the functions of ADP machines. However, the devices under consideration are p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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