TaxTMI 
TaxTMI 
2023 (6) TMI 657
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.... proposed to be imported and technical information regarding the same are as follows: SI No. Panel Size Product No Product Description 1 VIEW BOARD 55" INTERACTIVE FLAT PANEL IFP5550-3 VIEWSONIC IFP5550-3 /55" INTERACTIVE DISPLAY SYSTEM 2 IFP555O-5 VIEWSONIC IFP5550-5 /55" INTERACTIVE DISPLAY SYSTEM 3 VIEW BOARD 65" INTERACTIVE FLAT PANEL IFP6530 VIEWSONIC IFP6530(VS17775) /65" INTERACTIVE DISPLAY SYSTEM 4 IFP6532 VIEWSONIC IFP6532 /65" INTERACTIVE DISPLAY SYSTEM 5 IFP6532-2 VIEWSONIC IFP6532-2 /65" INTERACTIVE DISPLAY SYSTEM 6 IFP6532-B VIEWSONIC IFP6532-B /65" INTERACTIVE DISPLAY SYSTEM 7 IFP6550 VIEWSONIC IFP6550 /65" INTERACTIVE DISPLAY SYSTEM 8 IFP6550-2 VIEWSONIC IFP6550-2 /65" INTERACTIVE DISPLAY SYSTEM 9 IFP6550-3 VIEWSONIC IFP6550-3 /65" INTERACTIVE DISPLAY SYSTEM 10 IFP6550-5 VIEWSONIC IFP655O-5 /65" INTERACTIVE DISPLAY SYSTEM 11 IFP6552-1A VIEWSONIC IFP6552-1A /65" INTERACTIVE DISPLAY SYSTEM 12 IFP6552-1B VIEWSONIC IFP6552-1B /65" INTERACTIVE DISPLAY SYSTEM 13 VIEW BOARD 75" INTERACTIVE FLAT PANEL IFP7530 VIEWSONIC IFP7530(VS 17776) /7....
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....mote control and 70-80% glare free surfaces with a flicker free display. They are touch enabled with additional features such as multi-touch interaction, handwriting recognition, freehand touch, go typing, etc. along with applications such as calculator, stopwatch, buzzer, etc. The subject goods have slots for HDMI, VGA, LAN, USB, RS232 and audio ports, along with a high internal storage capacity. They are used in classrooms for teaching and in companies for presentations, meetings, etc. Their physical features include being wall mounted, not incorporating tilt, swivel or height adjustment mechanism and being available in different sizes ranging from 24 inches to 98 inches. Internet can be accessed by connecting them to a dongle via USB ports or by the use of a LAN cable. These Interactive Display Systems can also be connected to laptops, and input can be given either from the Interactive Display Systems to the laptop or vice versa. The subject goods allow user to record and share lectures/ notes/ presentations via email or QR codes. Further being cloud enabled, user can upload the notes on a pre-set cloud storage. 2.1 Building their argument on functionality and physical charac....
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....tion, by logical decision during the processing run." 2.2 The applicant has taken recourse to the elucidation provided in the Explanatory notes of Chapter heading 8471, regarding what constitutes as an "Automatic Data Processing Machine". They have inter alia submitted the following: i. An Automatic data processing machines is capable of storing a processing programme; is freely programmable; performs arithmetical computations; and can execute a processing programme by logical decision during the processing, without ii. They are machines which, by logically interrelated operations performed in accordance with pre-established instructions (program), furnish data which can be used as such or, in some cases, serve in turn as data for other data processing operations. iii. Automatic data processing machines may comprise in the same housing, the central processing unit, an input unit (e.g., a keyboard or a scanner) and an output unit (e.g., a visual display unit), or may consist of a number of interconnected separate units. iv. In order to be classifiable as an ADPM under Chapter 84, Note 5(A) to Chapter 84 which provides for the essentials of what....
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....ended that Chapter 8528 deals with monitors that are capable of receiving and displaying signals when attached to devices like, automatic data processing machine, video camera or recorder, etc.; that these monitors do not have capability of two-way communication; that they are not capable of processing any data on their own, nor are they capable of storing any data. However, the subject goods are IFPs having in-built CPU and RAM for executing programs. It has high storage capacity and are loaded with Android operating software. They are highly sophisticated machines which perform a plethora of functions beyond being used as traditional whiteboards in classrooms. They are not merely used for display of the information or presentation but are also capable of complex operations. Therefore, the goods are admittedly much more than mere display devices and cannot be classified under Heading 8528 as "Monitors". 3. In relation to the subject goods, the questions on which advance rulings have been sought are as follows:- a. Whether Interactive Display Systems (View Board) being imported by the Applicant are classifiable under the Tariff Item 8471 4190 of the Customs Tariff of In....
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....y Supreme Court. In this regard, it is to submit that the Apex Court dismissed the appeal based on monetary limits keeping the question of law open and without prejudice to the rights and contentions of the respective parties. Hence, it cannot be said that the issue of classification of similar products has attained its finality. 3. Further, it is to submit that this Commissionerate has preferred an appeal against the Ruling dated 31.01.2023 passed by CAAR, Mumbai in respect of Application No. CAAR/CUS/APPL/82/2022 - O/o Commr-CAAR-MUMBAI filed M/s. Compuage Infocom Ltd., Mumbai with regard to similar goods, namely, "Optoma Creative Touch 3-series Interactive Flat Panel (IFP) (Model - 3652RK, 3752RK, 3862RK), on the ground that the same would be classifiable under CTI 8528 5900 and not under CTI 8471 4090. 4. Also, this Commissionerate recommended for classification of the similar goods, namely, "Optoma Creative Touch 3-series Interactive Flat Panel (IFP) (Model - 3652RK, 3752RK, 3862RK), under CTI 8528 5900 as against the applicants claim under CTI 8471 4090 in respect of application for advance ruling filed before the Customs Authority for Advance Rulings, New D....
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....ied by the user; and iv) executing, without human intervention, a processing programme which requires them to modify their execution, by logical decision during the processing run. (B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. (C) Subject to paragraphs (D) and (E), a unit is to be regarded as being part of an automatic data processing system if it meets all of the following conditions: (i) it is of a kind solely or principally used in an automatic data processing system; (ii) it is connectable to the central processing unit either directly or through one or more other units; and (iii) it is able to accept or deliver data in a form (codes or signals) which can be used by the system. Separately presented units of an automatic data processing machine are to be classified in heading 8471. However, keyboards, X-Y co-ordinate input devices and disk storage units which satisfy the conditions of (ii) and (iii) above, are in all cases to be classified as units of heading 8471. (D) Heading 8471 does not cover the following when presented s....
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....erences etc. The Interactive Display Systems can be used to present documents, information and videos to different groups, educational purposes i.e., e-learning for example to a group of students in a classroom or during a meeting in a business environment 5. It is also observed as per Note 6(D) to Chapter 84, Heading 8471 does not cover the monitors and projectors not incorporating television reception apparatus when presented separately even if they meet all the conditions mentioned in Para(C) of the said Note. Further, para (E) states that machines, instruments or apparatus incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings. 6. The subject goods are not merely an ADPM and in fact it has many other additional inbuilt features with the main purpose to interact through display as per the intended use i.e., training, conferences, educational purposes, teaching via e-learning etc. The goods are mainly Display devices incorporating and working in conjunction w....
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.... Flat Panel", the main function of subject goods is interaction through display. Essentially, it acts as a display monitor, meaning that you can select to view documents, videos and even web links on a larger scale. 12. Further, as per Chapter Note 3 to Section XVI states that "Unless the context otherwise requires, composite machines consisting of two or more machines filled to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function". I find that the primary function of the subject goods is display and are also marketed as products with efficient display qualities, touch screen, write or draw on screen etc. 13. The Hon'ble Supreme Court in the case of Commissioner of Customs, Bangalore Vs. N.L. Systems (India) P. Ltd.-2010 (256) ELT 173 (SC) held that PXI Controller which was a computer based instrumentation product and capable of being controlled by a Personal Computer/Laptop but is not a PC/laptop-principal function of controllers is executing, control, algorithms for real- ....
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....Ganeshan, Mr. Chandrashekhar Thakur and Ms. Sonali Mote. They reiterated the CAAR-I application and submitted their stand regarding the grounds of application, relevant extracts of the tariff, previous rulings and technical writeup, while providing a detailed list of models vis-a-vis decision/judgement status under CESTAT or CAAR. They requested to issue ruling on same models which were covered under other CAAR rulings on the ground that the CAAR rulings are applicant specific and ratio of other CAAR rulings cannot be imported and applied to other applicant's case. They finally requested to issue ruling in the present case based on the facts on record. No one represented the jurisdictional Commissioner of Customs in the hearing. 7. I have perused the records of the case - CAAR-1 application, reply from jurisdictional Commissionerate, rejoinder of the applicant, oral submissions made during the hearing and the legal framework governing the classification of proposed imports in the form of relevant Chapter notes, Section notes and HSN Explanatory Notes to the respective Chapter headings. I proceed to deliberate upon the issue on the basis of information available on record. The su....
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....sing machine i.e., inbuilt CPU. The primary function of the goods is to display the given input data/ images/pictures/videos etc. ii. ADP machines performing specific functions other than Data processing are required to be classified as per their respective functions. Even though the functions of an ADP machines are inbuilt, the subject goods viz., Interactive Flat Panels being primarily used as Display System cannot be considered as a simple input or output device and is to be identified with its primary function of display by applying Note 6 (E) of Chapter 84. iii. As per Note 6(D) to Chapter 84, Heading 8471 does not cover monitors and projectors not incorporating television reception apparatus when presented separately even if they meet all the conditions mentioned in Para(C) of the said Note. Further, para (E) states that machines, instruments or apparatus incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings. iv. The description mentioned in the....
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....er Heading 8471. Thus, Heading 8471 covers not just one aspect of the product in question, but the complete product itself. 4. However, heading 8528 only covers the display monitor, when imported without the ADPM. Therefore, while Heading 8471 covers the product in question as a whole, Heading 8528 covers only one aspect of the product. Thus, Section Note 3 Chapter Note 5(E) has been wrongly attempted to be applied by the Chennai Commissionerate to the present case. 5. The fact is, heading 8471 specifically and completely covers the product in question, while Heading 8528 covers only one aspect of the imported product-the display aspect. Thus, on applying Rule 3(a) of the General Rules of Interpretation, heading 8471 will prevail. 6. The products concerned in the cases of Integral Computer and N.I. Systems are not ADPM. Thus, these cases cannot be applied to the present product in question. The product in question is not merely a "display board". The subject goods, on the other hand, are highly sophisticated machines which perform a plethora of functions beyond being used as traditional whiteboards in classrooms. These are not merely used for display of t....
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....pal function" 8.1 It is pertinent to mention that the principles for classification of goods are governed by the General Rules of Interpretation (GRI) and Harmonized Commodity Description and Coding System (Harmonized System or HSN). According to Rule 1 of the General Rules of Interpretation (GRI), "titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes." Chapter 8471 of Customs Tariff Act, 1975 covers, ''Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included' Chapter Note 6(A) states that: "For the purposes of heading 8471, the expression "automatic data-processing machines" means machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for the execution of the program; (2) being freely programmed in accordance with the requirements of the user, (3) perform....
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....ch satisfy condition 6(A)(iii) of the chapter notes. It is submitted that Interactive Display System, have a processing program, which make them capable of modifying its execution by logical decision during the processing run, so it satisfies condition 6(A)(iv) of the chapter notes. From forgoing discussions, it is clear that the subject goods satisfy all the requirements as mandated under Note 6(A) (previously referred to as 5 (A)) to Chapter 84 of the Customs Tariff Act, 1975. Accordingly, the subject goods justify the expression "automatic data processing machine" as is mandated in Note 6(A) of Chapter 84. 8.3 Note 6(B) to chapter 84 states Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Note 6(C) to chapter 84 specifies the conditions for a unit to be classified as being part of an automatic data processing system. Note 6(D) to chapter 84 lists certain separately presented products that are to be excluded from heading 8471, even if they can be classified as part of an ADP system. Note 6(E) to chapter 84 mentions that a machine incorporating or working in conjunction with an automatic data processing machine ....