AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 308
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....1.2020 has been upheld and the appeal has been dismissed. 3. The issue in both the appeals is regarding classification of the goods namely (i) (ViewBoard) ViewSonic IFP6550-2/65" Interactive Display System; and (ii) (ViewBoard)-ViewSonic-IFP7550-2/75" Interactive Display System. The appellant claims that the classification would be under Customs Tariff Item [CTI] 8471 41 90, though, earlier at the time of self-assessment, the appellant had claimed it to be under CTI 8471 90 00. The Department claims that it should be under CTI 8528 52 00. The Deputy Commissioner rejected the self-assessment done by the appellant under CTI 8471 90 00 and ordered for re-assessment of the goods under CTI 8528 52 00. The case set up by the appellant at the time of assessment was that the goods were Automatic Data Processing Machines [ADPM ] and not Monitors and, therefore, classifiable under CTI 8471 90 00 and not under CTI 8528 52 00. At the appellate stage, the appellant contended, on a re-consideration of the matter, that the goods were more specifically and correctly classifiable under CTI 8471 41 90. 4. In order to appreciate the issue involved in this appeal, it would be necessary to examine th....
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.... and an input and output unit, whether or not combined : 8471 41 10 --- Micro computer u Free - 8471 41 20 --- Large or main frame computer u Free - 8471 41 90 --- Other u Free - 8471 49 00 -- Presented in the form of systems u Free - 8471 50 00 - Processing units other than those of sub-headings 8471 41 or 8471 49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units u Free - 8471 60 - Input or output units, whether or not containing storage units in the same housing : 8471 60 10 --- Combined input or output units --- Printer : u Free - 8471 60 24 ---- Graphic printer u Free - 8471 60 25 ---- Plotter u Free - 8471 60 29 ---- Other u Free - 8471 60 40 --- Keyboard u F....
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.... From the perusal of the technical specification of the product, it appears that the said product contains that automatic data processing machine (i.e. processor), storage devices (i.e. hard disk, RAM), input devices (i.e. Touch screen) and output devices (i.e. Display) all embedded in one unit. Thus it appears that goods may be classified under tariff item 8471 50 00. Going further, the technical specifications of the product also reveal that this product has connectivity ports such as HDMI port, VGA ports etc. which clearly indicate that this product can act as standalone display monitor and can be used in conjunction with any other ADP machine. It remains undisputed that this product can act as standalone monitor also. Given large size of the display, it appears that product is suitable for viewing of the screen by a large number of persons which indicate that this product is primarily meant for display purposes. 5.3 As per information available in the website and catalogue of the product, the merchandise under consideration are designed to be used in classroom or business setting as an interactive whiteboard either in a standalone configuration or in conjunction with the cons....
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....********* 5.6 Further, it is also evident that large screens are convenient to be used for display purpose in comparison to using the same as automatic data processing machines for analysis since as the screen size increases, the display becomes more prominent. From the perusal of above description, it is clear that as the size of the goods increases, the display becomes more prominent which can cater to the large number of audiences. Thus the goods are primarily used for Display purposes and are intended for use with ADP machines of heading 8471. Further the technical specifications of the goods indicate that the products are equipped with following ports for making connections: ********* Presence of ports such as VGA, HDMI, USB, RS 232 etc. make these goods capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471. Therefore, it appears that goods are correctly classifiable as monitors for use solely or principally with ADP machines of heading 8471. ********* In the instant case, one may argue that due to presence of processor, the principal function of the product is the function of automatic data processing. Howev....
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....y cleared at Mumbai Customs reveals that there is no speaking order in the said clearance and so the basis on which, the officers have accepted the said classification is not clear. Whereas, in the instant case, a Speaking Order has been passed giving due reasoning for changing for changing the classification. 5.5 As far as principle use of the impugned goods is concerned, the Assessing Authority has discussed the same in impugned A.O. Further, it is widely known that the technological advancement is leading to "Convergence"- whereby different features and functions are being clubbed in newer devices. However, that does not dilute the concept of legally enshrined concept of "Principal use". I note that the Assessing Authority has acknowledged the fact of impugned goods capable of being used as APDP- considering its features. However, he has correctly made recourse to GIR 3I and out of heading 8471 (ADP machines) and 8528 (Display monitors), as heading 8528 occurs last in numerical order, the heading 85285200 was correctly applicable. Thus, burden of proof has been sufficiently discharged by the department in the instant case and due reasoning has been afforded for changing the cl....
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....ssing any data on their own, nor are they capable of storing any data; (vi) The goods, on the other hand, have an in-built CPU, 2GB RAM for executing program, 16 GB storage capacity and are also loaded with Android 7.0 operating software. Thus, the goods can perform a plethora of functions beyond being used as a traditional whiteboard in the classrooms. The goods are not merely used for display of the information or presentation but are also capable of complex operations and can function independently on standalone basis. The goods are, therefore, much more than mere display devices and would not merit classification under CTH 8528 as "monitors"; (vii) The size of the goods, namely, 65 inches and 75 inches and capability of being operated by means of a remote control are also features not usually found in monitors, as per HSN Explanatory Notes to Chapter 85; (viii) When the classification of the goods is determined by application of Chapter Notes and GRI 1, there is no occasion for invocation of GRI 3(c). In this connection reliance has been placed on the judgment of the Supreme Court in Commissioner of Central Excise, Nagpur vs. Simplex Mills Co. Ltd. [2005 (181) E.L.T....
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....0 (260) E.L.T. 161 (S.C.)] as also the decision of the Bangalore Tribunal in Logic India Trading Co. vs. Commissioner of Customs, Cochin [2016 (337) E.L.T. 65 (Tri. - Bang.)], the appeal against which was dismissed by the Supreme Court on 30.09.2016 and the judgment is reported in Commissioner vs. Logic India Trading Co. [2016 (342) E.L.T. A34 (S.C.)]; (iv) Reliance upon HSN Explanatory Notes by the appellant to suggest that since the size of goods do not exceed 30 inches and are usually not operated by remote control they would not be monitors, is misconceived as these are not mandatory conditions. In this connection reliance has been placed on the decision of the Tribunal in Commissioner of Cus. (Port-Import), Chennai-I vs. Omni Agate Systems [2018 (363) E.L.T. 252 (Tri. - Chennai)]; (v) The appellant is not correct in asserting that since the Deputy Commissioner had classified the goods under CTI 8471 50 00 by application of GRI 1, he should have refrained from applying GRI 3; (vi) Rule 1 of GRI envisages that if a Heading does not require the exclusion of the other rules, the other rules must also be applied for determining the classification of an article. Therefore, all....
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....n under CTH 8528 is that large screens (since the goods are of 65 inches and 75 inches) are convenient for display purpose in comparison to using the same as ADPM since the display become more apparent as the screen size increases. This observation led the Deputy Commissioner to hold that the goods are primarily used for display purposes and are intended for use with ADPM of Heading 8471. In coming to this conclusion, the Deputy Commissioner also noted that the presence of ports enable the goods to directly connect to ADPM of CTH 8471. 15. The Commissioner (Appeals) accepted the view taken by the Deputy Commissioner that because of the large size goods are meant for display purpose to cater to a large gathering and, therefore, as per Note 5(E) to Chapter Note 84, the goods would merit classification as per the specific use. What also prevailed with the Commissioner (Appeals) is the fact that the buyers intending to purchase a computer will not select the goods in issue as it is not known in the market as such. The Commissioner (Appeals) also noted that the goods were capable of being used as ADPM, but agreed with the Deputy Commissioner that in such a situation GRI 3(c) should be ....
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....te or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when....
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....tical computations specified by the user, and (4) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. Thus, machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, arc excluded even though the user may be able to choose between a number of such fixed programs. These machines have storage capability and also stored programs which can be changed from job to job. Automatic data processing 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 suc....
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....ut to many uses, for example, in industry, in trade, in scientific research and in public or private administrations. (See Part (E) of the General Explanatory Note to Chapter 84 with respect to the classification of machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function (Note 5 (E) to this Chapter)). HSN Explanatory Notes 85.28 (A) Monitors capable of directly connecting to and designed for use with an Automatic Data Processing Machine of Heading 84.71 This group includes monitors which are capable of accepting a signal from the central processing unit of an automatic data processing machine und provide a graphical presentation of the data processed. These monitors are distinguishable from other types of monitors (see (B) below) and from television receivers. The monitors of this group may be characterised by the following features: (i) They usually display signals of graphics adaptors (monochrome or colour) which are integrated in the central processing unit of the automatic data processing machine; (ii) They do not incorporate a channel selector or video tuner; (iii) They are fitted will connector....
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.... other operating systems, download and install new programmes in accordance with their needs and usage. Thus, goods are machines which can be freely programmed in accordance with the need of the user and hence, satisfy condition (ii) of Chapter Note 5(A) to Chapter 84. 20. The goods are capable of performing arithmetical computations depending on the input provided by the user. The goods are equipped with a calculator to perform arithmetical computations. It has also been admitted by the Deputy Commissioner in paragraph 5.3 of the Assessment Order that these machines perform general computing tasks. Thus, the goods meet the requirements of condition (iii) of Chapter Note 5(A) to Chapter 84. 21. A user can give a command to the goods and the same would be executed without any further intervention of the user. The CPU along with the operating system executes the command so given by the user by taking logical decisions during the processing run. Thus, condition no. (iv) is also satisfied. 22. As all the four essential conditions contained in Note 5(A) to Chapter Note 84 are satisfied, the goods qualify as ADPM classifiable under CTH 8471. 23. The goods also have an in-built proces....
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....s Appeal No. 86896 of 2021 decided on 03.12.2021] examined the appropriate classification of "interactive intelligent panel model-cloudtouch". The Department assessed the goods as "monitors/projectors" and not ADPM. The Tribunal, however, observed that though the goods may appear to have some characteristics of "monitors" but it was abundantly clear that they do contain a central processing unit and operate on software and function on their own. Therefore, the goods cannot be said to be merely projectors or monitors and recourse could not be taken to CTH 8528 for classification of the goods since they would be classifiable under CTI 8471 41 90, as claimed by the assessee. The relevant portions of the decision are reproduced below: "********** The dispute in this appeal of M/s Cloudwalker Streaming Technologies Pvt Ltd is on the appropriate classification of "interactive intelligent panel (automatic data processing machine) model - cloudtouch‟ imported by the appellant from M/s Shenzhen Konika E-Display Co Ltd, China. Bill of entry no. 3843844/ 06.05.2021, for 90 nos of this item comprising varying configurations with value of Rs.76,24,692/-, and bill of entry no. 3846255/06....
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....ot be classified under CTH 8528 as monitors. The HSN Explanatory Notes to CTH 8528 also mention that the viewable image sizes of the monitors do not generally exceed 30 inches and that they usually cannot be operated by a remote control. The goods, in the present case, are of 65 inches and 75 inches and do have a remote control. The goods, therefore, would not merit classification under CTH 8528. 29. What also needs to be noted is that classification of a product is determined according to the terms of the Headings and any relative section or Chapter Note. GRI (1) also provides that titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification is determined according to the terms of the Headings and any relative Section or Chapter Notes. It is only when such Headings or Notes do not otherwise require that the provisions (2),(3),(4),(5) and (6) of GRI would apply. The subsequent rules can be resorted to only when no clear picture emerges by application of rule (1). This is what was observed by the Supreme Court in Simplex Mills Co. Ltd. and the relevant portion is reproduced below: "11. The rules for the interpretation o....
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.... relevant portion of the decision is reproduced below: "12A.As discussed above the disputed product consisting of aluminium foil reinforced with plastic material (polyethylene) and backed with paper/ paper board is treatable as `aluminium foil‟ classifiable under Heading 76.06 in terms of the definition in Note 1(viii) of Chapter 76 and will be excluded from the purview of Chapter 48 of the Central Excise Tariff since the classification of the product in question is determinable as provided in Rule 1 of the Rules of Interpretation of the Central Excise Tariff in terms of the relevant headings of the tariff and the relevant Section or Chapter Notes, the other Rules of Interpretation cannot come into play." 31. It is also important to note that Rules of Interpretation as contained in Chapter Notes prevail over the General Rules of Interpretation as was observed by the Supreme Court in Commissioner of Central Excise, Pondicherry vs. Acer India Ltd. [2004 (172) E.L.T. 289 (S.C.)] : "60. Rule 1 of the Rules for the Interpretation of the First Schedule states that the titles of Sections and Chapters are provided for ease of reference only which having regard to Chapter 84 prov....