TaxTMI 
TaxTMI 
2023 (7) TMI 1248
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....said application has sought ruling on the following questions:- Question 1: Whether the 'Self-ordering Kiosks' imported in disassembled form into India, where Display Unit, Connection Box & Stand would be imported simultaneously, in a single shipment would merit classification under HSN: 8470 5010, as Electronically Operated Cash Register or as an Automatic Data Processing Machine housing a Central Processing Unit, Input Unit & Output Unit in same housing, under HSN: 8471 4190? Question 2: Whether the 'Self-ordering Kiosks' imported in disassembled form into India, where Display Unit, Connection Box & Stand would be imported simultaneously, in a single shipment would be entitled to exemption, specified at serial number 7 of Notification No. 24/2005 - Customs, dated 01-03-2005? Question 3: Whether the 'Self-ordering Kiosks' imported in disassembled form into India, where Display Unit & Connection Box would be imported simultaneously, in a single shipment would merit classification under HSN: 8470 5010, as Electronically Operated Cash Register or as an Automatic Data Processing Machine housing a Central Processing Unit, Input Unit & ....
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....f-ordering Kiosk' itself, without the need of human intervention; 'Self-ordering Kiosks' have specific end-use in retail environment; it enables a smart solution to browse products/services and provide multiple payment options for the interest audience of the customer; in addition to sale, the 'Self-ordering Kiosk' also maintains a record of sale transactions; further, the display-interface of 'Self-ordering Kiosk' is capable of being customised/freely programmed (in case of Self-ordering Kiosk,'s comprising of windows operating system), based on specific needs of the customer; 'Self-ordering Kiosk' is capable and suitable for a range of environments such as super-markets, retail stores, cafes, restaurants, health care, theatres etc. 3.3 The applicant has also stated that, the 'Self-ordering Kiosk' as a whole, comprises of the following features: (1) QR code/bar code scanner (2) built-in printer (3) near field communication (NFC) (4) touch screen display (5) processor (6) storage unit (7) operating system (8) built-in memory interface (9) capability of....
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....22 (381) ELT 565 (AAR-Cus)]; in the present case, the 'Self-ordering Kiosk' has an inbuilt data processing unit; input unit for receipt of data & output unit for conversion of data into dissemination form; however, the 'Self-ordering Kiosk' has been designed to not just be a simple 'data processing machine'; the "Self-ordering Kiosks" perform a specific function of facilitating sale of products/services and enable customers to make payments; it allows the end customers to select preferred products or services from a pool of options available; and it enables the customers to make payment for sale of products/services at the 'Self-ordering Kiosk' itself, without the need of human intervention; the 'Self-ordering Kiosks' have specific end-use in retail environment and enables a smart solution to browse products/services and provide multiple payment options; therefore, the 'Self-ordering Kiosk' performs a specific function other than data processing; Further, the 'Self-ordering Kiosk' has been designed to facilitate sale of products/provision of service and enable customers to make payments, without human interface, via an interac....
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...., no other condition has been prescribed for allowing exemption; therefore, import of 'Self-ordering Kiosk' in disassembled form into India, where display unit, connection box & stand would be imported simultaneously, in a single shipment, would be classifiable as 'Electronically Operated Cash Register' under Subheading 84705010 and would be entitled to exemption stipulated under serial number 7 of Notification No. 24/2005 - Customs, dated 01-03-2005. 5. Comments in the subject application have been received from the concerned Commissionerate wherein it is inter-alia stated that, when the 'Self-ordering Kiosks' is imported in disassembled form into India, where Display Unit, Connection Box & Stand would be imported simultaneously, in a single shipment, it appears that the display unit and connection box would merit classification under Sub-heading 84798999, whereas the stand would merit classification under Sub-heading 94032010/94032090; the subject goods do not appear to be classifiable under heading 8470, thus, the goods are not entitled for exemption specified at serial number 7 of Notification No. 24/2005 -Customs, dated 01-03-2005; when the 'Self....
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....e concerned Commissionerate has stated that a machine whose principal function is 'Display Function', is not classifiable under any specific heading, thus, the 'Self-ordering Kiosk' would be classifiable under the residual heading of Chapter 84 i.e. 8479 8999 however, the applicant has denied that the principal function of 'Self-ordering Kiosk' is 'display function. The applicant further denies that, 'Self-ordering Kiosk' can be classified under residual heading of Chapter 84 i.e. 84798999 and 'stand' cannot be classified as the 'Self-ordering Kiosk', itself. However, the applicant reiterates that the entire 'Self-ordering Kiosk' when imported in disassembled form would be classified as 'Electronically operated Cash-register' under Sub-heading 8470 5010 on the following ground:- (a) 'Self-ordering Kiosk' performs twin functions of facilitating sale transactions through an interactive display (enabling the browsing and selection of preferred products) & provision of multiple payment options and maintaining a record of such sale transactions, as and when they occur. In the comments dated 18-05-2023, ....
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....as under: "(C) CASH REGISTER This group comprises cash registers whether or not incorporating a calculating device. These machines are used in shops, offices, etc., to provide a record for all transactions (sales, services rendered, etc.) as they occur, of the amounts involved, the total of the amounts recorded and, in some cases, the code number of the article sold, quantity sold, time of transaction, etc. Data may be introduced either manually by means of a keyboard and a stop, lever or handle, or automatically, e.g., by means of a bar-code reader. Like calculating and accounting machines, some cash registers also have ancillary facilities for the automatic input of recurrent or pre-set data (e.g., card or tape readers). Usually, the result is visually displayed and printed, at the same time, on a ticket for the customer and on a tally-roll which is periodically removed from the machine for checking purposes. These machines are often combined with a till or drawer in which the cash is kept. They may also incorporate or work in conjunction with devices such as multipliers for increasing their calculating capacity, calculators of change due, automatic change dispe....
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....he HSN, only then it will become eligible to be classified under the residual heading. The applicant has further stated that the Hon'ble Supreme Court in the case of Hindustan Poles Corporation v. Commissioner of Excise [2006 (196) ELT 400 (SC)], has also held that when one particular item is covered by one specified entry, then the Revenue is not permitted to travel to residuary entry and the residuary entry is meant only for those categories of goods which clearly fall outside the ambit of specified entries; given that there is an 'appropriate heading' in the form of Cash Register under HSN 8470.50, 'Sell-ordering Kiosk' cannot be classified under the residual heading, thus, there is no merit in the contention of department that 'Self-ordering Kiosk' would be classified under the residual heading 8479. 6.4 As regards exemption vide serial number 7 of Notification No. 24/2005-Customs, dated 01-03-2005, the applicant has stated that when it has been conclusively established that 'Self-ordering Kiosk' is classifiable under Sub-heading 84705010 and all goods which are classified under the heading 8470, would be entitled to claim exemption from p....
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....r under heading 8528; similarly, CAAR has upheld the contention in the case of Compuage Infocomm Ltd. [2023 (383) ELT 343 (CAAR)]. The applicant has further stated that rule 1 of GRI provides basis for classification of an imported good: the classification shall be determined according to the terms of headings and any relative Section or Chapter Notes; Note 2 of Section XVI, provides principles for classification of parts, when they are imported on standalone basis and it provides, "2. Subject to Note 1 to this Section. Note I to Chapter 84 and to Note 1 to Chapter 85. parts of machines (not being parts of the articles of heading 8484, 8544, 8545. 8546 or 8547) are to be classified according to the following rules:- (a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409. 8431. 8448. 8466. 8473, 8487. 8503 8522. 8529. 8538 and 8548) are in all cases to be classified in their respective headings; (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machin....
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.... which is denied by them, at the very outset; in light of the discussion in foregoing paras, a part which is designed to be specifically used solely/principally with a machine classified under heading 8470 would be classified in the heading 8473, specifically Sub-heading 84732900. 6.5.3 The applicant has also stated that, the concerned Commissionerate has classified 'stand' under Sub-heading 94032010 when imported on standalone basis however they deny such suggestion at the very outset; the 'stand' is an accessory of 'Self-ordering Kiosk'; it is required to be used at commercials places/establishments where 'Self-ordering Kiosk' is required to be installed in standing form; it is designed to be used solely/principally with the 'Self-ordering Kiosk,'; on the basis of Note 2(b) of Section XVI read with heading 8473 read with rule 1 of GRI, the parts & accessories which are designed for use solely or principally with machine classifiable under headings 8470 to 8472, would always be classifiable under the heading 8473; in the present case, as a matter of fact, the 'stand' has been designed to be used solely with 'Self-ordering Kios....
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....ll, hence, the product is Electronic Cash Register and classified under appropriate Sub-heading of heading 8470; as regards the question of importing the components in combination such as display unit and connection box together, the AR pointed out that appropriate classification would again be under CTH 8470 with applicability of exemption under Notification No. 24/2005 because, only due to the logistic reasons, import of the subject goods is in disassembled form which can only be used as self-ordering kiosk on assembling the components after coming to India; lastly, on the question of importing the display unit, connection box and stand on standalone basis in multiple shipments, the AR believe that correct classification is under CTH 8473 as parts of the machine, which is classified under CTH 8470, mentioning that the components can only be used for self-ordering kiosk and not for any other machine; the AR then discussed correctness of their opinion regarding classification in light of rulings of other country and various case laws; the departmental representative reiterated the comments already furnished, in this regard and mentioned that cash register is an additional function ....
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.... box' is its integral part, designed to function solely/principally with it, with a pre-defined bracket, where 'display unit' is placed for the 'Self-ordering Kiosk' to start functioning and carries out various functions in 'Self-ordering Kiosk', inter-alia receipt printer, barcode leader, QR code reader, payment terminals, wi-fi connectivity, NFC connectivity; component/part of self-ordering kiosk' i.e 'display unit' is an integral component/part, designed to function solely/principally with 'self-ordering kiosk' and aids its various functions viz. Touch-enabled display panel, processor, memory interface, storage unit and operating system; 'stand' is designed to be used solely with 'Self-ordering Kiosk , is also an integral part of 'Self-ordering Kiosk' but it is an optional accessory. Further, the applicant has declared that no processing whatsoever would be carried out on the imported goods, post importation into India. 10.3 1 also note that, the applicant has sought ruling on the said six questions, vide Question No. 1 and 3, ruling has been sought on classification when 'Self-ordering Kiosk' is bein....
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....matic data processing machine but a multi-function machine and in the light of the foregoing, it is felt that reference drawn to Note 6(E) of Chapter 84 is relevant for the purposes of classification as the 'Self-ordering Kiosks' have specific end-use in retail environment and enables a smart solution to browse products/services and provide multiple payment options; therefore, the 'Self-ordering Kiosk' performs a specific function other than data processing; thus, by virtue of Note (E) of Chapter 84, the 'Self-ordering Kiosk' would not be classifiable as an ADP, under the heading 8471. 10.6 In order to arrive at the classification of 'Self-ordering Kiosk' in dis-assembled form, it is pertinent to refer to Explanatory Notes under Harmonized Commodity Description and Coding System of the World Customs Organization, particularly of heading 8470 wherein as regards the item, cash register it is inter-alia stated that these machines are used in shops, offices, etc., to provide a record for all transactions (sales, services rendered, etc.) as they occur, of the amounts involved, the total of the amounts recorded and, in some cases, the code number of the....
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....nd' is an optional accessory, 'Self-ordering Kiosk' with components, display unit and connection box will have the essential character of complete or finished article i.e. 'Cash Register'. Thereby, components, 'Stand' being an optional accessory will merit classification under the heading appropriate to it. In this regard, I note that 'The Accessories (Condition) Rules, 1963' provides under rule 2, 'Accessories of and spare parts and maintenance or repairing implements for, any article, when imported along with that article shall be chargeable at the same rate of duty as that article, if the proper officer is satisfied that in the ordinary course of trade: (i) such accessories, parts and implements are compulsorily supplied along with that article; and (ii) no separate charge is made for such supply, their price being included in the price 10.8 In light of the foregoing, 'Display Unit' is a comprehensive component/part which acts as an interface with the customer and performs several functions on its own; moreover, Connection Box facilitates payments against sale of products; it is an integral part in functioning ....
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.... facilitates payments against sale of products; it is an integral part in functioning of 'Self-ordering Kiosk'. Further, both, 'Display Unit' and 'Connection Box' are designed to function solely/principally with the 'Self-ordering Kiosk'. Thus, Display Unit or Connection Box, imported on standalone basis would merit classification under Subheading 84732900 in terms of Note 2(b) of Section XVI read with heading 8470 read with rule 1 of GRI thereby concluding that parts and accessories which are designed for use solely or principally with a machine classifiable under headings 8470 - 8472, would be classifiable under the heading 8473. and 'Stand' would merit classification under heading 9403, classification of 'Stand' at the Sub-heading level would depend upon its constituent material and end-use. 13. In light of the foregoing paras, I rule as under: (A) 'Self-ordering Kiosks' imported in disassembled form into India, where Display Unit, Connection Box & Stand would be imported simultaneously, in a single shipment, then 'Self-ordering Kiosk' with components, display unit and connection box will have the essent....