Automatic data processing classification depends on core machine functions, not specific applications used by the product.

Goods with independent automatic data processing capacity, free programmability, and the ability to execute programmes with logical decision-making without human intervention are classifiable as automatic data processing machines under Chapter 84. Chapter Note 5(e) does not apply where the products themselves satisfy the essential characteristics of ADP machines, even if used for specific applications, because that note is confined to machines performing a specific function other than data processing and working with an ADP machine. The residual specific-function headings were therefore inapplicable, and the competing classification was rejected.

---

---

Issues: Whether the goods in dispute were correctly classifiable as automatic data processing machines under Chapter 84 or were liable to be classified under headings applicable to machines performing a specific function other than data processing.

Analysis: The classification turned on the Chapter Note definitions of automatic data processing machines and on whether the products could store programmes, be freely programmed by the user, perform arithmetical computations, and execute a processing programme with logical decision-making without human intervention. The machines were found to have independent automatic data processing capacity, to be capable of running user-developed applications, and to function on their own without needing another computer. On that basis, Chapter Note 5(e), which applies only to machines performing a specific function other than data processing and incorporating or working in conjunction with an ADP machine, was held inapplicable. The reasoning adopted the Commissioner's factual findings and expert material.

Conclusion: The goods were correctly treated as computers / automatic data processing machines and not under the rival specific-function headings; the Revenue's challenge failed.

Final Conclusion: The appeal was rejected because the products satisfied the characteristics of automatic data processing machines and could not be displaced into the residual classification meant for machines of a specific non-data-processing function.

Ratio Decidendi: Where a machine satisfies the essential characteristics of an automatic data processing machine, including free programmability and execution of programmes with logical decision-making without human intervention, it cannot be classified as a machine performing a specific function other than data processing merely because it is used for particular applications.

---