2022 (2) TMI 1373 - AAR - Customs

Classification ruling: Creative Touch IFP as ADP machine under Customs Tariff Act

The ruling determined that the Creative Touch 5-series Interactive Flat Panel (IFP) should be classified under subheading 84714190 of the Customs Tariff ... Classification of goods proposed to be imported - Creative Touchy-series Interactive Flat Panel (IFP) (Model - 5652RK, 5752 RK &5852RK) - classifiable under customs tariff entry 84 714190 or not - whether the impugned goods, 'namely Creative Touch 5-series Interactive Flat Panel' can be considered as ADP machines? HELD THAT:- The machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, are excluded even though the user may be able to choose between a number of such fixed programs. The digital data processing machines have storage capability and also stored programs which can be changed from job to job. Digital machines process data in coded form. A code consists of a finite set of characters (binary code, standard six-bit ISO code, etc.). The data input is usually automatic, by the use of data media such as magnetic tapes, or by direct reading of original documents, etc. There may also be arrangements for manual input by means of keyboards or the input may be furnished directly by certain instruments (e.g., measuring instruments). The input data are converted by the input units into signals which can be used by the machine, and stored in the storage units. Part of the data and program or programs may be temporarily stored in auxiliary storage units such as those using magnetic discs, magnetic tapes, etc. Open source information as well as the submissions of the applicant portrays the subject item as an AIO which is a fully functional ADP machine that operates without restrictions. The A10 is equipped with hardware and software that allow it to perform, without artificial constraints, general computing tasks, where users are free to add or remove applications of their choosing. Creative Touch 5-series Interactive Flat Panel (IFP) merit classification under sub heading 84714190 of the first schedule to the Customs Tariff Act, 1975. Issues: Classification of Creative Touch 5-series Interactive Flat Panel (IFP) under Customs Tariff Act, 1975.Analysis:1. The applicant sought an advance ruling on the classification of the Creative Touch 5-series Interactive Flat Panel (IFP) they intended to import. The subject item was described as an All-in-one (AIO) computer system with various features and functionalities, including an embedded Android system preloaded with Android 9.0 (Oreo) OS and compatibility with Windows, Mac, and Chrome OS.2. The applicant argued that the subject item should be classified under customs tariff entry 84714190. They highlighted the capabilities and specifications of the IFP, emphasizing its classification as an ADP machine under Chapter 84 of the Customs Tariff Act, 1975. The jurisdictional Commissioner of Customs was invited to provide comments but did not respond.3. During the personal hearing, the applicant's representative elaborated on the product specifications and relevant tariff headings. Reference was made to the US customs cross ruling regarding similar monitors. The applicant contended that the subject item met the requirements of Note 5 (A) to Chapter 84, thus justifying its classification under subheading 84714190.4. The Customs Authority analyzed the characteristics and functionalities of the subject item based on the information presented. Considering the absence of comments from the jurisdictional authority, the ruling was made based on the available record. The key issue was whether the Creative Touch 5-series IFP could be classified as an ADP machine under Heading 8471 of the Customs Tariff Act, 1975.5. The ruling detailed the conditions that digital data processing machines must fulfill, as outlined in Note 5 (A) to Chapter 84. The IFP was assessed based on its ability to store processing programs, be freely programmed, perform arithmetical computations, and execute processing programs without human intervention. The ruling concluded that the IFP satisfied these conditions and should be classified under subheading 84714190.6. The ruling emphasized that the subject item, the Creative Touch 5-series IFP, functioned as a fully functional ADP machine without restrictions, allowing users to perform general computing tasks. Based on the discussions and analysis, it was ruled that the IFP should be classified under subheading 84714190 of the Customs Tariff Act, 1975.This comprehensive analysis of the judgment highlights the key issues, arguments presented, and the final ruling regarding the classification of the Creative Touch 5-series Interactive Flat Panel under the Customs Tariff Act, 1975.