TaxTMI 
TaxTMI 
2023 (6) TMI 858
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.... 1975 (hereinafter referred to as the 'CTA'). 2. The applicant submits that it is an immediate subsidiary of Intel Technology India Private Limited ("Intel India") and ultimate subsidiary of Intel Corporation, USA. The applicant is registered under the Companies Act, 1956 and is in the business of providing marketing support services to Intel Group companies worldwide and subscription and sale of products and solutions connected to data analytics, road safety, etc. It is submitted that Mobileye Connect is a surveying system used for collision avoidance and consists of three main components and functions of which are as under: (i) Camera Unit (ii) Display Unit (iii) GPS Unit 2.1 The applicant has submitted that key component in Mobileye Connect is Camera unit mounted on inside of windshield behind rear-view mirror of the vehicle, which plays a critical role in correct functioning of entire system and constantly scans road ahead, mapping objects within vision range, and using complex algorithms for identifying, and labelling them accordingly e.g., vehicles, traffic and lane signals, pedestrians, trees, etc. Camera unit also includes a sp....
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....ing 85.39), windscreen wipers, defrosters and demisters, of a kind used for cycles or motor vehicles." 3.1.2 The applicant has considered Heading 8512 which primarily covers electric lighting or signalling equipment or windscreen wipers, defrosters and demisters of a kind used for cycles or motor vehicles. The applicant is of the opinion that signalling function is not principal function of subject goods but is output of principle function of surveying, mapping and plotting. Therefore, Mobileye Connect will not be classified under heading 8512. 3.2 Classification under Chapter 87 of the Customs Tariff : Chapter 86 to Chapter 89 falls under Section XVII of the Customs Tariff Act which reads as "Vehicles, Aircraft, Vessels and Associated Transport Equipment". References in Chapters 86 to 88 to "parts" or "accessories" do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those Chapters. A part or accessory which answers to a description in two or more of the headings of those Chapters is to be classified under that heading which corresponds to the principal use of that part or accessory. 3.2.1 Heading 8708 of the Cu....
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....component or as being that machine which performs the principal function. 4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. 3.3.3 In terms of Section Note 4 to Section XVI of the Customs Tariff, if a machine consists of individual components which are intended to contribute together to a clearly defined function covered by Headings in Chapter 84 or Chapter 85 thereof, then whole machine is to be classified in Heading appropriate to that function. 3.3.4 Explanatory Notes to Chapter 90 of HSN reads: "General (I) General Content and Arrangement of the Chapter This Chapter covers a wide variety of instruments and apparatus which are, as a rule, characterized by their high finish and high precision. Most of them are used mainly for scientific purposes (laboratory research work, analysis, astron....
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....function. Additionally, Explanatory Notes VII to Section XVI of the HSN provide that the expression 'intended to contribute together to a clearly defined function ' covers only those machines and combinations of machines essential to performance of the function specific to the functional unit as a whole and excludes machines or appliances fulfilling auxiliary functions, which do not contribute to the function of the whole. 3.3.9 The Applicant submitted that surveying instruments and appliances are specifically covered under Heading 9015 of CTA and functioning of Mobileye Connect is identical to a Photogrammetrical Surveying Instrument; primary function of Mobileye Connect is to survey and plot topography of area ahead from photographs or digital images taken from two different view-points a known distance apart, which are restituted to obtain accurate information in respect of shape, size and co-ordinates of objects in the image or photographs, process the same with proprietary algorithm/ software and alert driver; and surveying function is constantly performed by camera unit and based on results of surveying function, and other components trigger visual and sound signal....
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....ition of the facts, products' technical and functional aspects are discussed briefly in para 2 and its sub-paras supra. The applicant submits that while all three units i.e., Camera Unit, Display Unit and GPS Unit are separately classifiable on standalone basis on merit under various CTHs of the CTA, but when put together the combined system performs specified functions of surveying and scanning the road ahead, mapping objects and thereafter through visual and sound alerts, alerting the driver of the vehicle of potential collision. According to the applicant primary function of subject goods is surveying and plotting topography of area ahead of the vehicle from photographs/digital images taken from two different viewpoints at known distance apart, which are restituted to obtain accurate information in respect of the shape, size and coordinates of objects in the image or photographs, process the same with proprietary software and alert the driver; and surveying function is constantly performed by Camera Unit and based on results of surveying function, other components trigger visual and/ or sound signalling function. The applicant submits that the subject goods are presently use....
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....to use. Each one of them employs multiple high-resolution cameras (6 at times) with multiple laser scanners as well and a recording device. The said mapping systems are used for indoor/outdoor scanning and mapping. 4.3.1 On the other hand, the Mobileye connect has three main components, namely: (i) Camera Unit consisting of a speaker, (ii) Display Unit and (iii) GPS Unit and they are connected to each other by cord/cordless (via Bluetooth) and function to alert the driver of any possible collision. It is observed that the ultimate function of the subject goods in not mapping or surveying but to alert the driver of the vehicle by way of visuals (through display) and sound (through speaker) signals. The ultimate function and utility of the products covered in the German rulings and the impugned goods are thus totally different. Thus, it cannot be said that the aforementioned equipment as described in the said rulings are similar to the impugned goods. 4.4 The US cross rulings e.g., N282922, N282920 and N282926 submitted by the applicant are evidently for classification of a specific item, namely (i) Leddar M16-L sensor module, (ii) Leddar Vu8 sensor module and (iii) Leddar M16 ....
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.... of subject goods but is output of principle function of surveying, mapping and plotting. Accordingly, the applicant has submitted that the Mobileye Connect will not be classified under heading 8512. From the perspective of HSN Explanatory Notes I find that the Note 2 to Chapter 90 provides as follows: 2.-- Subject to Note 1 above, parts and accessories for machines, apparatus, instruments or articles of this Chapter are to be classified according to the following rules: - (a) Parts and accessories which are goods included in any of the headings of this Chapter or of Chapter 84, 85 or 91 (other than heading 84.87, 85.48 or 90.33) are in all cases to be classified in their respective headings; (b) Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus. or with a number of machines, instruments or apparatus of the same heading (including a machine, instrument or apparatus of heading 90.10, 90.13 or 90.31) are to be classified with the machines, instruments or apparatus of that kind; (c) All other parts and accessories are to be classified in heading 90.33. 4.6.2 On compar....
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.... (Il) to Heading 9015 of HSN vis-a-vis that of Mobileye Connect, it is observed that the subject goods do not function the same way and thus do not merit classification under CTH 9015 of CTA, 1975. 5. As discussed in para 4.5 supra, the ultimate function of the subject goods appears to be to work as an alert system, i.e., to alert the driver of vehicle. Even the product is known in common trade parlance and marketed as "Advance Driver Assistance System" (ADAS). It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind. 5.1 The Apex court in the case of Porritts & Spencer (Asia) Ltd. Vs. State of Haryana [1983 (13) E.L.T. 1607 (S.C.)] observed as "Taxing Statute - Words and expressions to be interpreted in ordinary sense in preference to scientific or technical meaning. - Where a word has a scien....
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....the reasoning given by the applicant as to why the subject goods cannot be classified under Chapter Heading 8512 or 8708 as discussed at paras and sub-paras at 3.1 and 3.2 supra. Therefore, it is imperative to examine the competing chapters and tariff headings of the CTA. HS Explanatory Notes to Section XVI provides as under: 3.- Unless the context otherwise requires, composite machines consisting of two or more machines fitted together 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. 4.- Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. 5.- For the purposes of these Notes, the expression "machine" means any m....
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....ased on the most recent speed limit sign detected by the system. 7.1 In the context of above mentioned legal and factual positions, I find that the functionality of the Mobileye 8 Connect has to be defined from the user's perspective. Here the output generated by the impugned goods is far more important from functionality perspective rather than the technology employed in gathering the inputs. User of the impugned goods has nothing to do with technical mechanism employed for gathering the inputs. The applicant has tried to base their argument on the basis of input mechanism i.e. photogrammetrical surveying for classifying the goods which are essentially an alert system for vehicle drivers. However, on the basis of a detailed analysis in paras 4.6.1 & 4.6.2 supra it is observed that the impugned goods are not photogrammetrical surveying instrument or appliance from the user's perspective as photogrammetrical surveying is only a mechanism to collect inputs for overall functioning of the Mobileye 8 Connect. Applicant has tried to classify the goods on the basis of input mechanism, photogrammetrical surveying, rather than the output, an alert system for a vehicle driver, and....
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....(the GRI), which stipulates that: 1. The 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 and, provided such headings or Notes do not otherwise require, according to the following provisions: 2. (a).............. 2. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general....