Classification of handheld enterprise mobile computers as data processing machines, not telephones, turns on principal function and essential character.

Handheld enterprise mobile computers were held classifiable as automatic data processing machines under heading 8471, sub-heading 8471 30 90, because they satisfied Note 5(A) to Chapter 84 by storing programs and data, being freely programmable, performing user-specified computations, and executing processing without human intervention. Applying Note 3 to Section XVI, the principal function test favoured their scanning and data-processing role, while any communication capability was ancillary. Cellular connectivity in some models did not change their essential character, and the devices were distinguished from smartphones because telephony was not their main design purpose. They were therefore not classifiable under heading 8517.

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Issues: Whether handheld enterprise mobile computers are classifiable under sub-heading 8471 30 90 as automatic data processing machines, or under heading 8517 as telephones or other communication apparatus.

Analysis: The devices were found to satisfy the characteristics of an automatic data processing machine under Note 5(A) to Chapter 84, as they are capable of storing programs and data, being freely programmed, performing user-specified computations, and executing processing programs without human intervention. The devices combine scanning and computing functions for enterprise use, while communication features were treated as ancillary. Applying Note 3 to Section XVI, the relevant test was the principal function of the composite machine. The cellular connectivity available in some models did not alter their essential character, because the devices were not primarily telephones for cellular networks and were used mainly for barcode scanning and data processing. The reasoning also distinguished the devices from smartphones under Note 5 to Chapter 85, since telephony was only an added feature where present and not the main design purpose.

Conclusion: The handheld mobile computers are classifiable under heading 8471 and specifically under sub-heading 8471 30 90, and not under heading 8517.

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