2023 (6) TMI 858 - AAR - Customs

Mobileye 8 Connect Classified as Sound Signalling Equipment Under Customs Tariff Heading 8512 30 90.

M/s. Intel Solutions & Services India Private Limited Versus Principal Commissioner of Customs, Bangalore

Mobileye 8 Connect is classified under Customs Tariff Heading 8512 30 90 as 'Sound signalling equipment' according to the Customs Tariff Act, 1975. The ... Classification of goods proposed to be imported - Mobileye 8 Connect - to be classified under CTH 8512, Chapter 87 or CTH 9015? - HELD THAT:- The functionality of the Mobileye 8 Connect has to be defined from the user's perspective. Here the output generated by the impugned goods is far more important from functionality perspective rather than the technology employed in gathering the inputs. User of the impugned goods has nothing to do with technical mechanism employed for gathering the inputs. The applicant has tried to base their argument on the basis of input mechanism i.e. photogrammetrical surveying for classifying the goods which are essentially an alert system for vehicle drivers. Chapter heading 8531 of CTA excludes from its purview Electric sound or visual signalling apparatus of Chapter heading 8512 or 8530. CTH 8531 clearly provides that this heading provides for classification of all products of electrical apparatus used for signalling purposes, whether using sound for the transmission of the signal (bells, buzzers, hooters, etc. or using visual indication (lamps, flaps, illuminated numbers, etc.), and whether operated by hand (e.g.; door bells) or automatically (e.g., burglar alarms) with the exception of signalling apparatus used on cycles or motor vehicles (heading 85.12). And precisely due to this exclusion, it is found that the impugned goods do not merit classification under CTH 8531. Impugned good covered under present CAAR-1 application perform signalling function in both ways i.e. by visual mode and also by sound mode. There is no single eight-digit classification which can accommodate an apparatus or an equipment performing both visual as well as sound signalling function under the first schedule of the Customs Tariff Act, 1975 - Rule 3(b) of the GRI comes in to operation only if Rule 3(a) thereof fail and if both Rule 3(a) and Rule 3(b) fail, Rule 3(c) thereof will apply. Thus, the order of priority for deciding the classification under the Customs Tariff Act, 1975 is Rule 3(a) specific description; Rule 3(b) essential character; Rule 3(c) Heading which occurs last in numerical order amongst those entries which equally merit classification. It is found that two eight-digit tariff entries are applicable to the impugned goods namely 8512 20 90 and 8512 30 90. However, due to application of General Rule of Interpretation 3(b) it is held that the Customs Tariff Heading 8512 and more specifically tariff entry 8512 30 90: Sound signalling equipment in the first schedule to the Customs Tariff Act, 1975, notwithstanding performance of signalling function in both ways i.e. by visual mode as well as by sound mode, are the most appropriate classification heading & tariff entry for the Mobileye 8 Connect proposed to be imported by the applicant. Issues Involved:1. Classification of Mobileye 8 Connect under the Customs Tariff Act, 1975.Summary:Issue 1: Classification under Chapter 85 of the Customs TariffThe applicant considered Chapter Heading 8512, which covers 'Electrical lighting or signalling equipment... of a kind used for cycles or motor vehicles.' The applicant argued that the principal function of Mobileye Connect is not signalling but surveying, mapping, and plotting, thus ruling out classification under heading 8512.Issue 2: Classification under Chapter 87 of the Customs TariffThe applicant examined Heading 8708, which pertains to 'Parts and accessories of motor vehicles of headings 8701 to 8705.' They argued that surveying instruments are not mentioned or covered under this heading and are specifically excluded by Note 2(f) and Note 2(g) of Section XVII, which exclude articles of Chapter 85 and Chapter 90. Therefore, Mobileye Connect cannot be classified under Heading 8708.Issue 3: Classification under Chapter 90 of the Customs TariffThe applicant argued for classification under Heading 9015, which covers 'Surveying (including Photogrammetrical surveying)... instruments and appliances.' They claimed that Mobileye Connect functions similarly to a Photogrammetrical Surveying Instrument, taking digital images and processing them to alert drivers. They cited various legal precedents and advanced rulings from other jurisdictions to support their claim.Authority's Analysis and Decision:The Authority examined the applicant's submissions, including rulings from German and US Customs authorities and various case laws. The Authority found that the German rulings pertained to different types of mapping systems that are not similar to Mobileye Connect. The US rulings were for specific sensor modules classified under HTSUS 9015, which also did not align with Mobileye Connect's functionality.The Authority noted that Mobileye 8 Connect is marketed as an 'Advance Driver Assistance System' (ADAS) and provides five types of alerts to drivers, including Forward Collision Warnings, Headway Monitoring Warning, Lane Departure Warning, Pedestrians and Cyclist Warning, and Speed Limit Indicator. The primary function of Mobileye 8 Connect is to alert the driver, not to perform surveying or mapping.The Authority concluded that the principal function of Mobileye 8 Connect is to operate as an alert system for drivers, which falls under Chapter Heading 8512, specifically under tariff entry 8512 30 90: 'Sound signalling equipment.'Ruling:Mobileye 8 Connect is classified under Customs Tariff Heading 8512 30 90: 'Sound signalling equipment' of the Customs Tariff Act, 1975.