TaxTMI 
TaxTMI 
2022 (6) TMI 1408
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....t is with/without SIM 1 Vehicle-MountedComputer THOR VM 1A Without SIM 2 THOR VM3A Without SIM 3 THOR VM3 With SIM 4 THOR VM3 Without SIM 5 THOR CV31 Without SIM 6 Tablet Computer RT10A With SIM 7 RT10A Without SIM 8 RT10W With SIM 9 RT10W Without SIM 10 SCANPAL EDA71 With SIM 11 SCANPAL EDA71 Without SIM 12 Mobile Computer CK65 Without SIM 13 SCANPAL EDA61K With SIM 14 SCANPAL EDA61 K Without SIM 15 CT45 With SIM 16 CT45 Without SIM 17 CT45XP With SIM 18 CT45XP Without SIM 19 CT40 With SIM 20 CT40 Without SIM 21 CT40 XP With SIM 22 CT40 XP Without SIM 23 CT60 With SIM 24 CT60 Without SIM 25 CT60 XP With SIM 26 CT60 XP Without SIM 27 SCANPAL EDA51 With SIM 28 SCANPAL EDA51 Without SIM 29 CN80 With SIM 30 CN80 Without SIM 31 CN80G With SIM 32 CN80G Without SIM 2. The applicant is a distributor of Information technology and telecommunication products. The applicant intends to import the ab....
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....P machines; b. The principal function performed by these devices is that of processing data, and thus, they merit classification as suggested; c. The proposed imports are commercially known as "Mobile Computer", "Tablet Computers" and "Vehicle-Mounted Computers" and not as phone/communication devices/mobile phones. 2.2 As per the applicant, to qualify as an ADP machine, goods have to satisfy all the conditions mentioned in Note 5(A) to Chapter 84 and should not be covered by Note 5(D) and 5(E) ibid. The applicant has submitted that the portable computers in question comply with the above requirements, and therefore, are classifiable as ADP machine under CTH 84.71 as tabulated below: - Condition to be fulfilled by an ADP machine, as mentioned in Note 5(A) Compliance of the condition by the proposed Imports i. Storing the processing program/s and at least the data immediately necessary for the execution of the program; These devices can receive the inputs in form of barcodes, text fields, phone numbers, images signatures and even check boxes etc. The data so received is processed by these to provide the desired output. These machines have storage capa....
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....and not as "phone/communication devices". As per the trade parlance, the proposed imports are known in the market as "mobile computers, tablet computers and vehicle-mounted computers" and not as smartphones or telephones. 2.4 The applicant has contended that the product is an automatic data processing machine that cannot be classified under the heading 8517. The proposed imports are not primarily meant for communication purposes. Communication abilities like that of a traditional telephone/mobile telephone are only auxiliary functions that these portable computers perform. The applicant highlighted the following differences between conventional cellular phones/communication devices and impugned portable computers: - Feature Conventional Cell Phone / Smartphone Portable Computer Scanning Can scan only a few codes per hour, using apps. Mobile computers can scan around 500-1000 codes per hour. Tablet computers can scan around 20-60 codes per hour. Quality and speed are much better than conventional phone scanning. Ruggedness Not rugged. Can break on fall Mobile computers are extremely rugged. Designed to withstand huge falls and rough handling. Data ed....
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....t computers. The applicant also relied upon the case of Commissioner of Customs (Acc & Import) v. Samsung India 41 Electronics P. Ltd. reported in 2019 (4) TMI 915 - CESTAT MUMBAI, where it was held that the tablets imported were more suited for the purpose of working/reading rather than for the purpose of telephony, specifically as a mobile device, and thus were classifiable under heading 8471 and not heading 8517. 2.7 Contesting the decision of the 64th and 68th Session of the World Customs Organization in respect of the classification of RFID readers'/ bar scanners having inter-alia SIM capability as classifiable under heading 8517, the applicant stated that the opinions of WCO are not applicable to the products proposed to be imported for the following reasons: a. The WCO rulings did not consider the classification of heading 8471 in the aforesaid opinions. b. Unlike the ruling on tablet computers, which has been expressly accepted by CBIC, no similar circular has been passed accepting and adopting the above ruling. c. The proposed imports are portable computers and not merely RFID readers. d. The WCO ruling on tablet computers is more....
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....sioner. Therefore, I proceed to pronounce my rulings on the basis of information available on record. The issue before me is the classification of vehicle mounted computers, tablet computers and mobile computers. These are portable devices used in enterprise environments to run mobile apps, capture barcodes, take photos and videos, and provide voice and data communications for workers and managers. These devices combine personal computer and scanning functions (applies to mobile computers and tablet computers) in a single device that can be outfitted with off-the-shelf or custom software applications that perform everyday tasks, such as monitoring deliveries, tracking assets, and managing inventory (except vehicle-mounted computer which do not have the capability of scanning). And because they run on familiar operating systems such as Windows/Android, they offer the same functionality of a desktop computer or laptop. These processors are also equipped with a barcode scan engine and act as their own host, which means one can instantly update and edit information as it is captured. The applicant has suggested heading 8471 as an appropriate classification for these devices. GRI 1 prov....
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....n respect of possible alternate heading 8517, there is a need to examine the features of these devices in the context of note 3 to section XVI of the tariff. Heading 8517 covers telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the 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), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28. As the devices also have communication capabilities, including cellular connectivity in 14 out of 32 devices, classification under heading 8517 needs to be examined. Note 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 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". From the note, it is clear that a composite m....
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....to perform the functions of an automatic data processing machine such 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 ". The note clearly states that these devices are telephones for cellular networks designed to perform the functions of ADP machines. However, the devices under consideration are principally not telephones for cellular networks. In fact, 18 out of 32 models do not have the functionality of cellular connectivity, which shows that the SIM is not an integral part of these devices, as these devices are able to perform their primary function with or without the SIM card. These devices do not appear to be convenient for the purpose of telephony. As per circular no. 20/2013- Cus, dated 14.05.2013, "the difference between a "smartphone" and "tablet computer is not based on whether the product has a voice calling function or not, but on the principal features that a producer has intended for the device when designing and developing it". The manufacturer is advertising these products as mobile computers/ handheld computers/ ta....