TaxTMI 
TaxTMI 
2022 (10) TMI 1179
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....2 DT50Q With SIM 13 DT50-5G With SIM 2. The Applicant is engaged in the business of trading, designing, manufacturing, marketing and sale of Automated Identification and Data Capture (AIDC) products such as barcode scanners, barcode printers, mobile computers, POS printers and other information technology products utilised for primarily business and enterprise computing and IT solutions. The applicant intends to import the above-mentioned handheld mobile computers. These devices have Hard Keys (Volume up/down key, left/right scan, power, reset), Soft Keys (Three touch keys: Back, Home, Menu), are powered by Qualcomm or Mediatek Octa-core processor and possess the Android (7/8/9/10/11 or 12) operating system. They are equipped with front and rear cameras, battery and gorilla glass. They support GPS, Bluetooth and wi-fi system. They have multi touch capacitive screen, motion sensor equipped and have micro-SD card extension capability. As per the applicant, these devices are computers used for scanning barcode and processing data in order to increase efficiency of functions in supply chain management such as inventory management, asset tracking, stock taking etc....
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.... and units thereof. The Heading also includes portable ADP machines that do not require an external electrical output for functioning. The relevant entries of Heading 84.71 of are extracted in the table below : TABLE-2 8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included 8471 30 - Portable automatic data processing machines, weighting not more than 10 kg., consisting of at least a central processing unit, a keyboard and a display : 8471 3010 --- --- Personal computer 8471 3090 --- --- Other - Other automatic data processing machines To qualify as an ADP Machine, the goods have to satisfy all the conditions mentioned in Note 5(A) to Chapter 84 and should not be covered by Notes 5(D) and 5(E). Note 5A is extracted below : 5(A) For the purposes of heading 84.71, the expression "automatic data processing machines" means machines capable of : (i) Storing the processing program or programs and at least the data immediately necessa....
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....pplicant has stated that the proposed imports satisfy all the conditions to be fulfilled by an ADP Machine. Thus, the proposed imports are ADP Machines. 2.3 The applicant contends that the HSN Explanatory notes for Heading 84.71 state that a complete automatic data processing unit must comprise of at least the following three units, namely, Central processing Unit, Input Unit and an Output Unit. The Handheld Enterprise mobile computers proposed to be imported contain all three of the above units, i.e., input units in the form of a scanner, a central processing unit (inbuilt) in the form of processor and an output unit (the screen). Therefore, all the requirements to be an ADP machine is satisfied in the instant case. Thus, in terms of Rule 1 of the GIR, the mobile computer models in question are correctly classifiable under Heading 84.71 only. More specifically the products ought to be classified under Customs Tariff Item 8471 30 90 since they qualify the description given under sub-head 8471 30 i.e., they are portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display and are not pers....
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.... (iii) Loudspeakers and microphones; (iv) Television cameras, digital cameras and video camera recorders; (v) Monitors and projectors, not incorporating television reception apparatus. Therefore, even this Chapter Note is not applicable to the Handheld mobile computers in question. 2.6 Applicant further submitted that Chapter Note 5(E) states that : (E) Machines 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. It is contended that aforesaid Note also will not apply in case of the handheld mobile computers proposed to be imported as they are ADP Machines themselves and not machines incorporating or working in conjunction with an ADP Machine. Therefore, in view of the above, it is submitted that the handheld mobile computers proposed to be imported are classifiable under Heading 84.71 and more specifically, classifiable under Customs Tariff Item 8471 30 90. 2.7 The app....
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....uch as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems'. HSN Explanatory notes for Heading 8517 on Page No. XVI-8517-1 states that : "This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network." Further, the HSN Explanatory notes for Heading 8517 on Page XVI-8517-3 covers "Other Apparatus for Transmission or Reception of Voice, Images or other data, including apparatus for communication in a wired or wireless network (such as a Local or Wide Area Network)", wherein various types of devices that are covered under this entry are provided. In respect of sub-headings 8517 62 90 and 8517 69 90, the applicant states that these are residuary entries and will only apply if products are not classified elsewhere. As explained above in detail, the imported handheld mobile computers are classifiable under Heading 8471, and if not under 8....
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....n given, the way it is worded, it is understood that the product (smartphone) is a telephone for cellular network, having additional features of ADP Machine and some more features. It is submitted that the above amendment shall not be applicable to proposed imports for the following reasons - (a) The definition itself shows that smartphones are telephones with few additional features of ADP machine. Unlike smartphones' the proposed imports are essentially ADP Machine which have an additional feature of cellular connectivity. Thus, the principal and ancillary functions in proposed imports and smartphones, are diametrically opposite. (b) The way the proposed imports are built, it is evident that it is meant for rugged use and is not sleek like smartphones in similar price range. The proposed imports also don't have most of the features there in smartphones of similar price range. (c) Furthermore, smartphones of the same price range as the impugned product, are marketed as luxury items for the personal use whereas the impugned products are purely used industrially. Their designs are not ....
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....n of mobile computers under the tariff of India? The applicant in their CAAR-I form declared that they intend to import the impugned devices under the jurisdiction of Principal Commissioner/Commissioner of Customs, Air Cargo Complex, Sahar, Andheri (East); Import Commissionerate-II Chennai customs and Chennai VII-Air Cargo Commissionerate. New Custom House, Air Cargo complex, Chennai. Copies of applications, therefore, were forwarded to the jurisdictional Commissioners of Customs for comments. 3. The Air Cargo Commissionerate, Chennai, one of the jurisdictional Commissionerate through which the proposed imports are to take place, have forwarded the comments with regards to the application for advance ruling. The question No. 1 of the application has been replied to in affirmative. It has been opined that the principal function performed by the proposed imports is that of processing data akin to that of an ADP Machine. Scanning and processing of scanned data is the primary function of the said goods. As per submitted details Handheld Enterprise Mobile Computer satisfy the Conditions laid in Para 5(A) of Chapter note of HSN 84. As per submitted technical specifications, so....
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.... for flat products is a processing line composed of an uncoiler, a coil flattener, a slitter and a recoiler. A "cut-to-length line" for flat products is a processing line composed of an uncoiler, a coil flattener, and a shear' as Chapter Note 5 to Chapter 84, the earlier Chapter Notes 5(A), (B), (C) & (D) are being referred to as Chapter Notes 6(A), (B), (C) & (D) in the following paras. 5.1 GRI 1 provides that the classification of goods shall be "determined according to the terms of the headings and any relative section or chapter notes". In the event that the goods cannot be classified solely on the basis of GRI 1. and if the headings and legal notes do not otherwise require, GRIs 2 through 6 may be applied in order. In order to merit classification under Heading 8471, it is clear, that these devices need to satisfy the requirements of Note 6(A) to Chapter 84, the said Chapter note is reproduced below :- For the purposes of heading 8471, the expression "automatic data processing machines" means machine capable of : (i) storing the processing programme or programmes and at least the data immediately necessary for the execution of the programme; ....
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....e 3 to Section XVI of the tariff stipulates that, "Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machine 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". From the note, it is clear that a composite machine performing various functions is to be classified according to the principal function performed by such a device. In the instant case, these devices combine computing and scanning functions for monitoring deliveries, tracking assets, and managing inventory. They also have communication capabilities. However, for the products under consideration, automatic data processing appears to be the main function, while other functionalities of said machines are not different from auxiliary functions that could be seen on any computer, such as desktop or laptop computers. In Circular No. 20/2013-Cus., dated 14-5-2013, clarification has been provided by the Board regarding the classification of "tablet computers" under Heading 8471 stating t....