TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1122
X X X X Extracts X X X X
X X X X Extracts X X X X
....entation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. Acer India Private Limited, (hereinafter called as the "Applicant") is a company engaged in the business of manufacturing and selling business laptops, desktops, workstation computers, chrome books, tablets, monitors, projectors, digital signage, smart devices, electronics and accessories and support in IT peripherals including trading thereof and provision of ancillary services connected therewith. The applicant in the course of its business, undertakes supply of various models of 'Acer' braded Interactive Flat Panels within India either after importing them as finished goods or getting them manufactured on contract basis through third parties. They have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....one, etc. The IFP has a multi touch feature and is compatible with a stylus and a remote control, procured along with the IFP. 4.5 IFP has a 4K User Interface and has an Android Operating System, with the ability to write and store documents, assisting in file management, undertaking multiple tasks at the same time on the IFP, supporting music and video players and a user-friendly toolbar. The IFP can be considered to function as an 'All-in-One-PC'. Further, Copies of the brochure of Acer Interactive Flat Series is enclosed with application. 4.6 IFP contains a self-sufficient embedded program which is catered to the requirements of the user. The product is also capable of having storage, processing data available in coded form and executing it without any human intervention. They undertakes supply of various models of IFP with different display sizes. 4.7 The applicant is supplying Interactive Flat Panel under Tariff Heading 8471 which classifies as 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. 5. INTERPRE....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction Notes for "machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers; and parts and accessories of such articles" thus covering Chapter 84 and Chapter 85 of the Customs Tariff. e) The Applicant submits that the relevant portions of HSN entry and Explanatory Notes to HSN for Chapter 8471, which the Applicant considers to be applicable to the Applicants IFP is as follows- Relevant entries from GST Tariff - Chapter 84 71 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 . - Other automatic data processing machines : 8471 41 - Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: 8471 41 90 ---- Other Relevant portion of the Explanatory Notes to HSN Note 5 of Section XVI defines machine as follows: 5.-For the purposes of these Notes, the expression "machine" means any machine, machinery, plant, equipment, apparatus or app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....als but may also use other technologies. They may be self-contained, all the elements required for data processing being combined in the same housing, or they may be in the form of systems consisting of a variable number of separate units. This heading also covers separately presented constituent units of automatic data processing systems described above." "Thus, machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, are excluded even though the user may be able to choose between a number of such fixed programs. These machines have storage capability and also stored programs which can be changed from job to job." f) The Applicant submits that on a perusal of the Tariff Entry and Explanatory Notes, Chapter Heading 8471 is the most appropriate chapter heading to cover various models of IFP which is an automatic data processing machine. g) The Applicant submits that the product intended to be supplied is an IFP which contains a self-sufficient embedded program, which is catered to the requirements of the user. The product is also capable of having storage, processing data available in coded form and executing it without any human in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t was observed that if the product duly satisfies the stipulations as mentioned in the Section note and chapter note of Section XVI and Chapter 84 it is classifiable under Chapter Heading 8471, as an ADP machine. Relevant extract is reproduced hereunder: 12. In view of the above discussions we are of the considered view that it would be appropriate to conclude that BenQ Interactive Flat Panel RP7502 Black 75", imported and subsequently supplied to the applicant by their supplier namely i.e., M/s Benq India Private Limited would merit classification under chapter heading 8471 only when the stipulations as mentioned in the section note and chapter note stands complied. In case the impugned machine consisting 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 same as a whole would merit classification in the heading appropriate to that function, as stipulated in section note 4 to section XVI supra. ... 14. The ruling so sought by M/s Savex Technologies Pvt. Ltd., E-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cessing machine set forth in Note 5 A to Chapter 84, HTSUS. It is freely programmable by the user with no hardware or software blocks preventing the user from downloading any operating system or off-the-shelf software. ..... The applicable subheading for the Microsoft Surface will be 8471.41.0150, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Automatic data processing machines and units thereof ...: Other automatic data processing machines: Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: Other." The rate of duty will be free. b. In CLA-2-84:OT:RR:NC:N4:120 a Clever Touch Plus Monitor, an interactive whiteboard with a flat panel display having an incorporated ADP machine being a single, standalone unit, met all the conditions of Legal Note 5(A) to Chapter 84, Harmonized Tariff Schedule of the United States (HTSUS) was held to be properly classifiable under CTH 8471. Relevant portion of the extract is reproduced hereunder: The Clever Touch Plus is stated to meet all the following conditions of Legal Note 5(A) to Chapter 84, Harmonized Tariff Schedule of the United States (H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The Tribunal held as follows: 18. The impugned goods are IFP having an in-built CPU (ARM Cortex A.73 dual-core 1.2GHz Processor), a 2GB RAM and Android 7.0 Operating software. In addition, they also have an internal storage capacity of 16GB. Thus, goods are machines which are capable of storing data or programmes for the execution of programmes and satisfy condition no. (i) of Chapter Note 5(A) to Chapter 84. 19. The goods come with a pre-installed operating system, namely, Android 7.0. The said Android version is a customized operating system for these IFP. Further, the goods also have an OPS slot. With the use of the OPS Slot, additional hardware can be connected to the goods and the OPS Slot can also be used for installing other operating software such as Windows, etc. on the goods. Thus, the goods are machines on which the user is able to load and execute a program. In other words, the goods are capable of executing any application/ program which is stored on its memory. A user can, with the use of either Android or other operating systems, download and install new programmes in accordance with their needs and usage. Thus, goods are machines which can be freely programmed i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all be produced before the Customs authorities at the time of import. c. In the case of Hewlett Packard India Sales Pvt Ltd v. Commissioner of Customs (Import), Nhava Sheva reported at 2023-VIL-03-SC-CU, wherein the issue before the Hon'ble Supreme Court was with respect to the classification of an 'All-in-One Integrated Desktop Computer'. The question pertained with respect to the portability of such a product and while allowing the Appeals filed by the Assessee, the Apex Court set aside the order of the Tribunal classifying the goods under CTH 8471 30 10. d. Additionally, reference is made to the following case laws, wherein the product in dispute were IFP and the same were classified under CTH 8471 41 90: * In Re: M/s Compuage Infocom Ltd, 2022-VIL-57-AAR-CU * In Re: M/s. Savex Technologies Pvt. Ltd. 2023-VIL-19-AAR * In Re: M/s Audio Distribution House Pvt Ltd 2022-VIL-02-AAR-CU r) The Applicant submits that apropos the above, it is submitted that the product intended to be imported in the present scenario is capable of working as an ADP machine on a standalone basis. The IFP is a multi-touch panel which comes with a stylus for writing onto the flat panel. It has a 4....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the essential factors for determining whether a product falls Chapter 30 or not is whether the product in understood as a pharmaceutical product in common parlance [see C.C.E. v. Shree Baidyanath Ayurved, 2009 (12) SCC 413 = 2009 (237) E.L.T. 225 (S.C.)]; Commissioner of Central Excise, Delhi v. Ishaan Research Lab (P) Ltd. - 2008 (13) SCC 349 = 2008 (230) E.L.T. 7 (S.C.)]. Further, the quantity of medicament used in a particular product will also not be a relevant factor for, normally, the extent of use of medicinal ingredients is very low because a larger use may be harmful for the human body. [Puma Ayurvedic Herbal (P) Ltd. v. C.C.E., Nagpur - 2006 (3) SCC 266 = 2006 (196) E.L.T. 3 (S.C.)]; State of Goa v. Colfoax Laboratories - 2004 (9) SCC 83 = 2003 (158) E.L.T. 18 (S.C.)]; B.P.L. Pharmaceuticals v. C.C.E. - 1995 Supp (3) SCC 1 = 1995 (77) E.L.T. 485 (S.C.)]. [Emphasis Supplied] w) Basis the above, it is submitted that IFP has been understood as an ADP machine in the trade circle and those concerned with it understand it as an ADP only. x) In light of the aforesaid arguments, it is submitted that IFP machine is an ADP machine in common parlance and classifiable under Cha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... specified in the schedules appended to Notification No. 01/2017-CT (Rate) dated 28.6.2017 on such supplies on the basis of description specified therein, including rate of tax @ 14% CGST + 14% SGST (specified in Schedule-IV to the Notification). 6.4 The Central jurisdictional authority has not furnished any reply in this regard. Hence, it is construed that there are no proceedings pending or decided on the issue raised by the applicant. 7. PERSONAL HEARING 7.1 Mr. J. Rishab & Ms. Gayathri G S of M/s. Shivadas and Shivadas Law Chambers, Bangalore appeared for the personal hearing as authorized representatives (AR) of M/s. Acer India Private Limited on 16.06.2025. The AR reiterated the submissions made in their application for advance ruling. 7.2 The Authorised Representatives explained the features of IFPDs (interactive Flat Panel Display) Imported and supplied by them. For supply of IFPDs, apart from imports they are also procuring indigenously, make some additions and supplying the same to their customers. These IFPDs are being supplied mostly to educational institutions. AR further informed that though the nomenclature for the product is IFPD, the product imported and suppli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t an ADP machine, its purpose and what an IFPD and where & why it is used. 8.5 In common parlance, an ADP machine refers to the use of computer systems and software to efficiently and accurately process, organise, and manage data. It performs a wide range of activities related to handling of data in the digital format. They are designed to streamline data related tasks, reducing the need for manual intervention and minimising the risk of costly errors. They are widely used in various fields including manufacturing, Finance, healthcare and Logistics. However, as per the Chapter notes 6 of Chapter 84 of the GST Tariff, for the purpose of heading 8471, the expression 'automated data processing machine means machine capable of (i) storing the processing programme or programmes and at least the data immediately necessary for the execution of the programme (ii) being freely programmed in accordance with the requirements of the user; (iii) performing arithmetical computations specified by the user; and (iv) executing, without human intervention, a processing programme which requires them to modify their execution, by logical decision during the processing run; (B) Automatic dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns, conference rooms for presentations and collaboration, and retail spaces for interactive displays. 10. An IFPD has far better screen quality featuring 4K resolutions and a clear picture regardless of lighting. It is more versatile, enhanced wide viewing angles, quality of images which make it possible for more participants to see the screen from long distance. Most IFPDs have a number of built-in software integrations, which come pre-installed on all displays. They also have the option of a slot-in PC that will make the display a fully functional Windows computer. 11. Most IFPDs, which not only connect wirelessly but also integrate seamlessly with wireless networks for secure internal sharing. And with the built-in apps, there are bound to be multiple ways to share your screen or your digital whiteboard. 12. One should understand that IFPD is an improved version of a projector/monitor. An IFPD is a large, flat-screen display that combines the features of a traditional display with interactive capabilities. While all electronic gadgets are prone to up gradation and improvement, IFPD is no exception. The modern IFPDs now enhanced to include all the basic features of an ADP are ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s specified by the user; and (d) executing a processing or modify the programme without human intervention, by logical decision during the processing run; 16. While the IFPD satisfies all the criteria of an ADP, its intended purpose is to display big with resolution to reach audience in a large gathering especially in official meetings, conferences and in class rooms. It is only the IFPD that is improved or upgraded to accommodate features of an ADP, but the essential character of an IFPD is to deliver the functions it is intended to. 17. An IFPD and an ADP is differentiated primarily by the core functionality. ADP focusses on storing, processing and retrieving data. The IFPD is designed for user interaction with visual content, often in collaborative settings. ADP machines are essentially computers designed for data manipulation whereas IFPDs are primarily display devices with touch sensitive capabilities. The human interaction with an ADP machine involves inputs through keyboards, mouse etc., however, the primary focus is on processing data and not direct interaction with the display. The core function of an IFPD is to provide large, flat display surface where users can direc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f an ADP machine with minimum configuration is sufficient for an IFPD for its use. However, the variety with regard to an ADP machine is based on the processing speed, capacity to store data, to perform robust arithmetic calculations, modification by logical reasoning without human intervention. 21. An ADP on the other hand has the primary purpose of storing, processing of program and its execution, preforming arithmetical computation as per the requirements of the user, able to modify the programme without human intervention, by logical decision during the processing. An ADP is differentiated with IFPD based on the usage, i.e touch sensitivity, and large display screen. The large screen ADP is commonly used only in control rooms and server rooms to display real time data and system information. 22. For the above reasons, it can be construed that IFPD shall not be classified as ADP due to its intended purpose. 23. As contended by the applicant, the nature of product includes all-in-one composite system which incorporates the features of an ADP also. In such cases, through Rule 2(b), going by Rule 3(b) of the General Interpretative Rules(GIR) of HSN, a product made up of differen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... system with additional features of an ADP, which are ancillary to the main function of large display and touch capabilities. On a combined reading of para 3(b) of GIR, para 3 of the Section Notes, para 6(E) of the Chapter Notes and para 8 of the Chapter notes it is very clear that though a machine preforms various functions, it has to be classified under the heading of its principal function or in its residual heading. 28. The applicant further contended that in the absence of any specific classification for IFPD in the tariff, the product should be classified in the heading applicable to the product and available in the tariff. 6(E) of the Chapter notes to Section 84 comes into picture and states that the machines incorporating the ADP features are to be classified to their respective functions and if not available are to be classified under residual heading. 29. As the appropriate classification is not available for the product in question in the tariff, the CBIC came up with the clarification for classification of the said product by way of Circular No. 12/2025-Customs dated 7" Apr, 2025. Earlier, after examination of the issue and with changes made in the budget 2025-26, has....