Fingerprint reader scanners used in data processing systems fall under CTH 8471, not the residual heading CTH 8543.

A fingerprint reader scanner functioning as an optical reader in an automatic data processing system was classifiable under CTH 8471 because it connected to the CPU, accepted or delivered data usable by the system, and satisfied Chapter Note 5(C) to Chapter 84. Chapter Note 5(E) was inapplicable since the device primarily performed data processing by comparing fingerprint data with stored data, rather than a separate specific function. CTH 8543, being residual, could not apply where the goods were specifically covered elsewhere. The lower classification was set aside and the assessee succeeded.

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Issues: (i) Whether the fingerprint reader scanner was classifiable under CTH 8471 or CTH 8543.

Analysis: The impugned goods were found to be fingerprint readers working on optical technology, connectable to the central processing unit, and capable of accepting or delivering data in the form of codes or signals usable by the system. CTH 8471 specifically covers magnetic or optical readers. The goods satisfied the conditions in Chapter Note 5(C) to Chapter 84 and were not excluded by Chapter Note 5(D). Chapter Note 5(E) was held inapplicable because the goods essentially performed a data-processing function by comparing fingerprint data with data stored in the motherboard or CPU, and did not perform a specific function other than data processing. CTH 8543 was treated as a residual heading for electrical machines and apparatus not specified elsewhere in Chapter 85.

Conclusion: The goods were held classifiable under CTH 8471 and not under CTH 8543, in favour of the assessee.

Final Conclusion: The classification adopted by the lower authority was set aside and the appeal was allowed.

Ratio Decidendi: A fingerprint reader scanner that functions as an optical reader and is used in an automatic data processing system, where it accepts or delivers data usable by the system and performs data processing rather than a separate specific function, falls under CTH 8471 and not the residuary heading CTH 8543.

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