TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 858
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....39;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 speaker which provide audio alerts when, based on road scanning and....
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.... 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 Customs Tariff covers 'Parts and accessories of motor vehicles of headings 8701 t....
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....luding 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, astronomy, etc.), for specialised technical or industrial purposes (measuring or checking, observation, etc.) or for medical purposes. ....
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....; 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 signalling function, as delivery of output of primary function. Hence, in terms of Note 3 to Chapter read with Note 4 of Section XVI, Mobileye Connect is to be classified based on....
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....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 used as collision avoidance system in vehicles. The applicant had earlier imported 100 units and 20 units of Mobileye Connect from Mobileye Vision Technologies Limited, Israel, by cl....
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....r/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 sensor module from Canada, respectively. The said products, are described and identified as optical LED sensor module which are suitable for a number of applications, including collision ....
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....f 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 comparing the functions of Photogrammetrical Instruments and Appliances as provided in Explanatory Note (Il) to Heading 9015 of HSN with the functionality of Mobileye Connect, I find that the same is claimed as identical to a Photogrammetrical Surveying Inst....
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....n 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 scientific or technical meaning and also an ordinary meaning according to common parlance, it is the latter sense that in a taxing statute the word must have been used unless contrary intention is clearly expressed by the legislature. [para 5]" 5.2 In the case of Holos....
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....ry 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 machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85. 6.1 Chapter Heading 8531 of CTA provides as follows: Electric sound or visual signalling apparatus (for example, bells, sirens, indicator panels, Burglar or fire alarms), other than those of Heading 851....
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....puts. 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 by the manufacturer's own admission, discussed in para 4.5 above, these goods perform the function of generating five different alerts for the users of the goods- vehicle drivers. 7.2 As seen earlier the Chapter heading 8531 of CTA excludes from its purview Electric sound or visual signalling apparatus of Chapter heading 8512 or 8530. CTH 8531 clearly provides that this heading provides fo....
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....erial 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 description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and....