Principal function controls tariff classification: portable computers with ancillary connectivity remain automatic data processing machines.

Portable computers with and without SIM capability were classified under heading 8471 because they satisfied Note 6(A) to Chapter 84 as automatic data processing machines: they stored programmes and data, were freely programmable, performed user-specified computations, and executed processing without human intervention. Notes 6(C), 6(D) and 6(E) did not apply, as the goods were ADP machines used principally for data capture, processing, inventory management and enterprise functions. Their cellular or voice capability was merely ancillary, and design features such as barcode scanning and rugged enterprise use showed that telephony was not their principal function. The goods were therefore classified under heading 8471, not heading 8517.

---

---

Issues: Whether the imported portable computers, including models with and without SIM capability, were classifiable under heading 8471 as automatic data processing machines or under heading 8517 as smartphones/telecommunication apparatus.

Analysis: The devices were found to satisfy the requirements of Note 6(A) to Chapter 84 as they store processing programmes and data, can be freely programmed, perform user-specified computations, and execute processing programmes without human intervention. Note 6(C) was considered inapplicable because the goods were not merely parts of an ADP system but ADP machines themselves. Notes 6(D) and 6(E) were also found inapplicable because the devices were principally used for data capture, processing, inventory management, and related enterprise functions. Although some models had cellular connectivity, the cellular or voice function was treated as ancillary. Applying Note 3 to Section XVI, the principal function was identified as automatic data processing, with barcode scanning and enterprise data processing as the core use. The devices were also distinguished from smartphones because many models lacked SIM capability, and their design, ruggedness, scanning capacity, and enterprise use indicated that telephony was not their principal purpose.

Conclusion: The devices were held to merit classification under heading 8471 and not under heading 8517.

Final Conclusion: The advance ruling settled the classification in favour of the applicant by recognising the imported portable computers as ADP machines of subheading 84713090.

Ratio Decidendi: Where a composite device has data processing as its principal function, ancillary communication capability does not change its tariff classification from heading 8471 to heading 8517.

---