2023 (7) TMI 1065 - AAR - Customs

Classification of Thermal Printer Ribbon under Customs Tariff Heading 8443 99 59

The court classified the 'Thermal Printer Ribbon' (TPR) under Customs Tariff Heading (CTH) 8443 99 59, finding it to be an essential part of thermal ... Classification under Heading 8443 - Section Note 2 to Section XVI - classification of parts and accessories - Distinction from Heading 9612 (typewriter or similar ribbons) - HSN Explanatory Notes - requirement of 'impression' for Heading 9612 - Customs Tariff classification of parts and accessories of printersClassification under Heading 8443 - Section Note 2 to Section XVI - classification of parts and accessories - Distinction from Heading 9612 (typewriter or similar ribbons) - HSN Explanatory Notes - requirement of 'impression' for Heading 9612 - Thermal Printer Ribbons (TPR) proposed to be imported are classifiable under CTH 8443 99 59 of the First Schedule to the Customs Tariff Act, 1975. - HELD THAT: - The Authority accepted the applicant's description that TPRs are specially designed for dye sublimation/thermal transfer ID card printers (DTC and HDP), are integral to the functioning of those printers and become operational upon installation, containing components (supply/take-up spools, thermal transfer ink ribbon, flanges, RFID tag, cleaning roller) and are not ink cartridges or ink spray nozzles. Applying Section Note 2 to Section XVI, parts suitable solely or principally for a particular kind of machine are to be classified with the machines of that kind. Reliance on CESTAT (Honeywell) that thermal printers fall under heading 8443 32 supported treating TPR as parts/accessories of such printers. The Authority examined the alternative classification under Chapter 96.12 and, following the HSN Explanatory Notes, found that heading 9612 requires ribbons to be 'inked to give impressions' (i.e., ink transferred by impression/impact). TPRs operate by heat transfer (dye/resin melted by print head) and are wider and physically different from typewriter/computer ribbons; therefore they are not 'typewriter or similar ribbons' under 9612. Given that TPRs are not ink cartridges or spray nozzles (entries 8443 99 51-53) they fall in the residual entry 8443 99 59 (Other) as parts and accessories of goods of sub headings 8443 31/8443 32. [Paras 3, 4]TPR is classifiable under CTH 8443 99 59 as parts and accessories of printers of sub headings 8443 31/8443 32 and not under CTH 9612.Customs Tariff classification of parts and accessories of printers - Rate of customs duty applicable on Thermal Printer Ribbons classified under CTH 8443 99 59. - HELD THAT: - Following the classification of TPR under CTH 8443 99 59, the Authority specified the applicable duties for that tariff item as determined in the ruling. The Authority recorded the rate of Basic Customs Duty and Integrated Goods and Services Tax that apply to imports falling under the said sub heading. [Paras 3, 4]Basic Customs Duty: Nil; Integrated GST: 18%.Final Conclusion: Advance Ruling: Thermal Printer Ribbons (TPR) imported by the applicant are classifiable under CTH 8443 99 59 (parts and accessories of printers of sub headings 8443 31/8443 32) and attract Basic Customs Duty nil and IGST at 18%. Issues Involved:1. Classification of 'Thermal Printer Ribbons' (TPR) under the Customs Tariff Act, 1975.2. Correct classification if the initial classification is found incorrect.3. Applicable rate of duty on the import of 'Thermal Printer Ribbons'.Detailed Analysis:Issue 1: Classification under Tariff Item 8443 99 59The applicant, HID India Pvt. Ltd., engaged in the import and distribution of HID brand products, sought an authoritative ruling on the classification of 'Thermal Printer Ribbon' (TPR) designed for use with thermal ID card printers (DTC and HDP printers). The applicant argued that TPR should be classified under Customs Tariff Heading (CTH) 8443, which covers 'Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442; Other printers, copying machines, and facsimile machines, whether or not combined; parts and accessories thereof.'The applicant contended that TPR is an integral part of thermal printers, without which the printers cannot function. This aligns with the decision in Honeywell Automation India Ltd. vs. CC, ACC, Mumbai 2018 (359) E.L.T. 402 (Tri. - Mumbai), which classified thermal printers under CTH 8443 32 90. The applicant further cited Section Note 2 of Section XVI, which supports classifying parts and accessories of machines under their respective headings if they are essential for the machine's operation.Issue 2: Alternative Classification under Chapter Heading 9612The applicant also addressed the possibility of classifying TPR under Chapter Heading 9612, which includes 'Typewriter or similar ribbons, inked or otherwise prepared for giving impressions, whether or not on spools or in cartridges.' The applicant argued that TPR differs significantly from typewriter ribbons in both physical characteristics and functionality. Typewriter ribbons are narrow and thin, designed to transfer ink by impact, whereas TPR uses heat to transfer dye or resin onto ID cards. The applicant supported this argument with the US Customs and Border Protection (CBP) Advance Ruling and a Brazilian Advance Ruling, both of which classified similar products under sub-heading 8443.99.The judgment agreed with the applicant's contention, noting that TPR is not inked to give impressions by impact but by heat transfer, making it unsuitable for classification under CTH 9612. The Explanatory Notes for CTH 9612 and the dictionary definition of 'impression' further supported this conclusion.Issue 3: Applicable Rate of DutyThe judgment concluded that TPR should be classified under CTH 8443 99 59, which covers 'Other parts and accessories of goods of sub-heading 8443 31, 8443 32.' The applicable rate of duty for TPR under this classification is Basic Customs Duty (BCD) - Nil and Integrated Goods and Services Tax (IGST) - 18%.Conclusion:The ruling determined that 'Thermal Printer Ribbon' (TPR) proposed to be imported by the applicant is classifiable under CTH 8443 99 59 of the First Schedule to the Customs Tariff Act, 1975. The applicable rate of duty is BCD- Nil and IGST - 18%.