2012 (10) TMI 917 - AT - Customs

Imported device reclassified as 'Personal Digital Assistant' for tariff benefits. Decision based on data processing capabilities.

The Tribunal allowed the appeal, classifying the imported device as 'Personal Digital Assistant' under Tariff Item 84713090 instead of 'Pocket Surfer ... Classification – Personal Digital Assistant (Data Processing Machine) - Revenue found the item to be “Pocket Surfer Device - revenue was of the view that the equipment has no capability for processing of data – Held that:- Device is of a kind used principally in data processing - device is covered by Chapter Note 5(B) - It is not explained which is the individual function, other than data processing which the device is capable of doing. Note 5(D) will apply in situations like that of a CNC machine or a machine used in testing of eyes which machine may be using a computer to program the device and analyse the data - Heading 84713090 is more appropriate than Heading 84798999 – in favor of assessee Issues: Classification of imported goods under Tariff Items 84713090 and 84798999Classification under Tariff Items 84713090 and 84798999:The appellants imported a consignment declared as 'Personal Digital Assistant' under Tariff Item 84713090 but were classified as 'Pocket Surfer Device' by the Revenue. The Revenue argued that the device lacked data processing capability and should be classified under Tariff Item 84798999. The delay in issuing a speaking order regarding the classification change was noted. The Commissioner (Appeals) upheld the Revenue's decision, leading to the appeal.Interpretation of Chapter Note 5 of Chapter 84:The Revenue relied on Chapter Note 5 of Chapter 84, defining 'automatic data processing machines.' The appellants argued that the device, a dedicated internet device, could perform various functions similar to a desktop computer, including web browsing, email, and more. They contended that the device's capabilities aligned with Tariff Item 84713090 for automatic data processing machines.Arguments for Classification under Heading 84713090:The appellants argued that the device could be programmed for web resolution settings, username, password, and functions like a calculator, justifying classification under Heading 84713090. They further contended that the device's purpose was to connect to the internet and retrieve data from computers, making it more suitable for classification under Heading 84.71 alongside computers rather than under Heading 84.79.Analysis and Decision:The Tribunal analyzed the device's functionality and specifications, concluding that it was primarily used for data processing by retrieving data from remote computers through a wireless network. The device's ability to accept and present data usable by the system indicated its classification under Chapter Note 5(B) of Chapter 84. The Tribunal found that the device's functions aligned more closely with Heading 84713090 for automatic data processing machines rather than Heading 84798999 for heavy industrial machines.Conclusion:The Tribunal allowed the appeal, determining that the device should be classified under Tariff Item 84713090 with consequential benefits to the appellant. The decision emphasized the device's data processing capabilities and its alignment with the criteria outlined in Chapter Note 5 of Chapter 84.