TaxTMI 
TaxTMI 
2025 (1) TMI 1702
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....dated 16.07.2024 has submitted as follows: 2.1 M/s. Apple India Private Limited, India ('Applicant'), is a company having its registered head office located at 13th Floor, Prestige Minsk Square, Municipal No. 6, Cubbon Road, Bengaluru, Karnataka. The Applicant is a company incorporated under the Companies Act, 2013 and is engaged in the business of importing electronic consumer goods under the brand name 'Apple' such as iPhones, iPads, iPods, Mac Book (laptops) and computers for selling the same in India through online sales portal, channel partners and distributors located in India. 2.2 The Applicant in furtherance to its current business is proposing to engage in import of 'Apple Vision Pro' into India. The kitted accessories of Apple Vision Pro namely Dual Loop Band, Solo Knit Band, and Light Seal [kitted accessories] shall be imported by the applicant on standalone basis. Overview of Apple Vision Pro 2.3 Apple Vision Pro hereinafter referred to as the 'device', is designed to be worn on the user's head and acts as a spatial portable automatic data processing machine. The devices functions as an independent spatial computing machin....
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....ce, i.e., Apple Vision Pro as mentioned below: a) Apple Vision Pro (HMD) b) Light Seal Cushions c) Battery d) Cover e) 30W USB-C power adaptor f) USB-C Charge Cable 2.9 The Apple vision pro along with the listed accessories will be imported in a consolidated pretty white box under a one single invoice, where a consolidated/single price is charged for the unit, i.e., the device and the accessories. Further, the specified accessories, namely, light seal, solo knit band and dual loop band (together referred to as 'kitted accessories') shall be imported by the Applicant on a standalone basis. The Apple Vision Pro and its accessories (imported in the pretty white box) and the kitted accessories (imported on a standalone basis) shall be assembled at the brick-and-mortar retail store and sold to customers as a single unit (i.e., Apple Vision Pro) for a consolidated/single price. Overview of the kitted accessories (Dual Loop Band, Solo Knit Band and Light Seal) which are imported on a standalone basis 2.10 The accessories imported by the Applicant, namely the Dual Loop Band, Solo Knit Band, and Light Seal are specifical....
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.... Vision Pro body. For ease of reference an image of the Light Seal has been re-produced as follows- 2.11 Thus, in view of the above overview, the aforementioned products augment the Apple Vision Pro's user experience by improving the overall usability of products. Applicant's interpretation of Law/Facts 3.1 The Applicant submitted that the kitted accessories namely Dual Loop Band, Solo Knit Band, and Light Seal shall be imported on a standalone basis. The classification of each of the kitted accessory are analysed as under: Analysis of classification of Dual Loop Band under CTH 8473 3.2 In the present case, since the Dual Loop Band is to be used with Apple Vision Pro which is essentially an Automatic Data Processing Machine and is classifiable under CTH 8471, reference must be made to CTH 8473 which covers "Parts and Accessories" of products covered under CTH 8470, CTH 8471 or CTH 8472. 3.3 Here it becomes pertinent to discuss the scope CTH 8473 which inter alia covers "parts and accessories" which are solely and principally used with products covered under CTH 8471. 3.4 The term "parts" or "accessories" has not been defined in the Customs Tariff, there....
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....her, the term "accessory" includes those products which perform. a particular function, to increase its range of operations or perform a particular service relative to the main function of the products. 3.9 In the present case, the Dual Loop Band is a specialized product for use with Apple Vision Pro. It is designed to secure or hold the Apple Vision Pro in place comfortably. The Dual Loop Band features a pair of upper and lower straps which are interconnected with each other through a joint. The Dual Loop Band attaches to the Audio Straps of Apple Vision Pro with a simple and secure mechanism, and release tabs which allow the user to quickly detach it when needed. 3.10 Based on the preceding description of the Dual Loop Band, it is understood that the Dual Loop Band is used to enhance the functionality and application of the Apple Vision Pro and is solely used with Apple Vision Pro. By securely fastening the Apple Vision Pro to the user's head, the Dual Loop Band significantly enhances the user experience by improving the overall usability of the product. 3.11 Further, the Dual Loop Band can only be used along with Apple Vision Pro and is not compatible with any other....
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....kly detach it when needed. 3.17 Based on the preceding description of the Solo Kinit Band, it is understood that the Solo Knit Band is used to enhance the functionality and application of the Apple Vision Pro. Similar to the Dual Loop Band, the Solo Knit Band also helps in fastening of Apple Vision Pro to the user's head, thereby enhancing the user experience by improving the overall usability of the product. 3.18 Here it is also pertinent to mention that the Solo Knit Band can only be used along with Apple Vision Pro and is not compatible with any other electronic device. In order to support this fact, reference may be made to Apple online store wherein in the dropdown option for compatibility of Solo Knit Band it has been stated that it is compatible with Apple Vision Pro and no other device has been mentioned therein. 3.19 Thus, it can be said that the Solo Knit Band adds to the convenience and effectiveness of the Apple Vision Pro. Therefore, it fulfils the definition of the term "accessory" as defined earlier. Further, as the Solo Knit Band is used solely and principally with the Apple Vision Pro, thus it also fulfils the requirement of an accessory to be classifi....
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....ay be made to Apple online store wherein in the dropdown option for compatibility of Light Seal it has been stated that it is compatible with Apple Vision Pro and no other device has been mentioned therein. 3.25 Thus, it can be said that the Light Seal adds to the convenience and effectiveness of the Apple Vision Pro. Therefore, it fulfils the definition of the term "accessory" as defined earlier. Further, as the Light Seal is used solely and principally with the Apple Vision Pro, it also fulfils the requirement of an accessory to be classified under CTH 8473, in terms of HSN Explanatory Notes to CTH 8473 3.26 As stated above, the Light Seal is a tailor-made product which is designed specifically for use with Apple Vision Pro. It is made up of stainless steel, thermoplastic elastomer (which is painted with polyurethane), polycarbonate polyester, (Nickel & PVD coated) and is covered with polyester and nylon yarn for an aesthetic defined finish. It also comprises of a narrow woven elastomeric band which is placed for support of the nose of the user. Due to its composite nature and the absence of any single material that predominantly defines its essential character, the Light S....
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....stoms, Air Cargo Complex, Bengaluru. The application was forwarded to the Office of the Commissioner of Customs, Air Cargo Complex, Bengaluru for their comments on 28.10.2024, 05.12.2024, 24.12.2024 & 22.01.2025. No response/comments has been received in this matter till now. Details of Hearing 5:1. A hearing was held on 21.10.2024 at 03.00 PM. Shri. Gautam Khattar, Shri Anurag Sehgal and Shri Jimit Gandhi, authorized representative on behalf of the applicant appeared for the hearing and reiterated the contention submitted with the application. They submitted that the subject goods i.e. kitted accessories of Apple Vision Pro namely Dual Loop Band, Solo Knit Band and Light Seal will merit classification under CTI 84733099. They contended that as per Note 3(b) of GRI, the essential characteristics of the accessories are of part of the goods under CTI 84713090 as these are used to increase comfort and user experience. They submitted the index of compilation of legal provisions and case laws Nobody appeared on behalf of the Department for hearing. Discussion and findings 6.1 I have considered all the materials placed before me in respect of the subject goo....
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.... of micro- OLED displays deliver more pixels than a 4K TV, VisionOS Operating System, 8-core CPU with 4 performance cores and 4 efficiency cores, M2 Chip, R1 Processor for real-time sensor input processing, Wi-Fi connectivity, Bluetooth connectivity, 3D camera, 256 GB, 512 GB & 1 TB internal storage, real time sensor, among others. These devices weigh 600 to 650 grams and runs on rechargeable batteries having a battery life of 2 hours for general use. These devices can process data, execute programmes, and connect to internet via a wireless network, send/receive e-mails, upload/download files, download software applications, conduct video/VoIP {voice over Internet Protocol) communication, support game controller, among others. The device also supports the following input accessories, i.e., Keyboards, Trackpad, Game Controller and Bluetooth Mouse support for VisionOS 2. The input method for the device is hands, eyes and voice commands instead of a traditional keyboard. 6.3.3 In order to merit classification under heading 84.71, it is clear, that these devices need to satisfy the requirements of the Note 6(A) to Chapter 84. For the sake of clarity, the Chapter Note 6 to Chapter 84....
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....he headings appropriate to their respective functions or, failing that, in residual headings 6.3.4 Therefore. there is a need to examine whether the features and specifications of Apple Vision Pro meet the criteria as laid down in the relevant Chapter Note reproduced above. For any device to be held as an ADP and classifiable under sub-heading 847130, four essential conditions as mentioned above in Note 6(A), are required to be satisfied. Let's break down and explain each of the four conditions one by one, with clarity and detail in the context of this device: a). Storing the processing program or programs and at least the data immediately necessary for the execution of the program: The Apple Vision Pro which integrates augmented reality (AR) and virtual reality (VR) technologies, is designed to store and execute complex processing programs for its AR and VR applications. The device comes with a storage capacity of 256 GB, 512 GB or 1 TB, an Apple M2 Chip with 8-core CPU, 10-core GPU, 16-core Neural Engine and an Apple RI co- processor. It runs VisonOS, a sophisticated operating system that facilitates the storage and execution of programs. The programs stored withi....
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....accordance with their needs and usage. Thus, goods are machines which can be freely programmed in accordance with the need of the user and hence, satisfy condition (ii) of Chapter Note 5(A) to Chapter 84." I also draw attention to Note 5 to Chapter 85 which stipulates that "For the purposes of heading 85.17, the term "smartphones" means telephones for cellular networks, equipped with a mobile operating system designed 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". From the aforesaid Note, it is clear that for a device to qualify as an automatic data processing machine, it should be capable of installing and running applications based on the user's requirements. In the case of the Apple Vision Pro, the user, through the use of VisionOS, can download and install new programs according to their specific needs and usage. This demonstrates that the device functions as a machine that can be freely programmed in accordance with the user's requirements. ....
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....ng the arithmetical computations as specified by the user, and its processing program enables it to modify its execution dynamically based on logical decisions during the processing run without human intervention. In light of these capabilities, the Apple Vision Pro meets all the criteria outlined in Note 6(A) of Chapter 84, thereby qualifying it as a device covered by the definition of automatic data processing machine (ADPM). 6.3.6 Further, HSN Explanatory Notes to CTH 8471 further elucidates on what constitutes an Automatic Data Processing Machine (ADPM). The relevant portion of the Explanatory Notes are extracted below: "(1) AUTOMATIC DATA PROCESSING MACHINES AND UNITS THEREOF Data processing is the handling of information of all kinds, in pre-established logical sequences and for a specific purpose or purposes. Automatic data processing machines are machines which, by logically interrelated operations performed in accordance with pre-established instructions (program), furnish data which can be used as such or, in some cases, serve in turn as data for other data processing operations. This heading covers data processing machines in which the lo....
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....the input may be furnished directly by certain instruments (e.g., measuring instruments). The input data are converted by the input units into signals which can be used by the machine, and stored in the storage units. Part of the data and program or programs may be temporarily stored in auxiliary storage units such as those using magnetic discs, magnetic tapes, etc. But these automatic data processing machines must have a main storage capability which is directly accessible for the execution of a particular program and which has a capacity at least sufficient to store those parts of the processing and translating programs and the data immediately necessary for the current processing run. Automatic data processing machines may comprise in the same housing, the central processing unit, an input unit (e.g., a keyboard or a scanner) and an output unit (e.g., a visual display unit), or may consist of a number of interconnected separate units. In the latter case, the units form a "system" when it comprises at least the central processing unit, an input unit and an output unit (see Subheading Note 2 to this Chapter). The interconnections may be made by wired or wireless ....
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....ection Notes and Chapter Notes as specified under Customs Tariff Act 1975 are applicable for classification of the impugned goods. It would not be out of place to mention here that Chapter Note 6 (E) of Chapter 84 stipulates that machine performing a specific function other than data processing merits classification in appropriate headings/residual headings. Thus, any primary functionality other than data processing would disentitle the Apple Vision Pro from getting classified under heading 8471 ibid. 6.3.10 From the submissions of the applicant, and the information available on the webpage of M/s. Apple, it appears that the Apple Vision Pro can process data, execute programmes, and connect to internet via a wireless network, send/receive e-mails, upload/download files, download software applications, browse the internet, watch videos, conduct video/VoIP {voice over Internet Protocol) communication, allow to execute programs and tasks based on voice commands through Siri, Apple's voice assistant, play games in an innovative and interactive way and others. 6.3.11 The Apple Vision Pro can perform a wide range of tasks and functions across various domains, seamlessly inte....
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....e classification of "tablet computers" under heading 8471 stating that, " ... The mobile phone calling function could be provided by the products only as a supplementary function because it could not be activated without running an operating system of the devices .... These devices are not intended to be a substitute for a mobile phone to make voice calls, but, according to its main technical features is designed as a substitute for laptops. 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". Thus, as per the said circular, tablet computers are classifiable under heading 8471 and not under heading 8517 despite the fact that the product is having cellular connection functionality, considering its principal function as automatic data processing. Similarly, in this case, the principal function of the Apple Vision Pro is automatic data processing and not communication. Therefore, the device does not appear to merit classification under heading 8517, as this heading primarily covers communication....
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....onalities such as internet surfing, multimedia playing, watching videos, computing, voice calling etc., and can be put to multiple uses. Considering the above information and details, the impugned goods satisfy the condition of Note 6(A) to Chapter 84 but does not fall under the purview of the Explanatory Note 2 to Chapter Heading. 9504 as game consoles/game. machine as they are not principally designed for entertainment purposes including playing games. Further, I also relied upon on the case of M/s. Asus India Private Limited vs. Commissioner of Customs, ACC, Chennai [(2023) 11 Centax 85 (Tri .- Mad)], wherein the Hon'ble CESTAT, Chennai held that the goods described as 'Computer System Desktop' has all the characteristics of personal desktop computer, though have gaming capabilities, also have computing capabilities, internet suffering, multimedia playing, editing, word processing, etc. and satisfy all the condition set forth in Note 6(A) to Chapter 84, is classifiable under CTH 8471 as an automatic data processing machine. Applying the above rules and rationale of the above said judgements, the Apple Vision Pro does not appear to classifiable under CTH 9504....
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....lassifiable under HSN 8471 30, which is the same classification used for laptops. In the present case, the primary functionality of the Apple Vision Pro is similar to that of a tablet or laptop, as it performs automatic data processing. Although it offers additional features like immersive AR/VR experiences, these are auxiliary features that do not change the device's core purpose as a computing device. Based on this reasoning, and in line with the CBEC Circular, the Apple Vision Pro can be considered similar to tablet computers and laptops for classification purposes. 6.3.16 I have also relied on the Advance Tariff Ruling dated 15.08.2024 (Ruling reference no. 600010679) issued to M/s. Apple Distribution International Limited, wherein the same product i.e. Apple Vision Pro, was classified under CTH 8471.30.000 as an ADPM, by the Irish Revenue Commissioners based on the General Rules of Interpretation (GIR) and Note 6(A) of Chapter 84. The classification of the Apple Vision Pro is further supported by the Binding Tariff Information (BTI) decision dated 11th June 2024 (reference no. IEBTIIENEN004-2024-BTI201) issued by the Classification Unit (BTI) of the Re....
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....a keyboard. As per the research paper on "Spatial Computing: Concept, Applications, Challenges and Future Directions" cited as arXiv:2402.07912 [cs.HC] and submitted on 30.01.2024, it is submitted that over the years, User Interfaces (UIs) have seen constant development and improvement. Command line interfaces, which have been around since the 1960s, require users to type in commands in order to interact with computers. In the 1980s, graphical user interfaces were developed to make computers more user-friendly. These interfaces used windows and icons to represent commands and data. In the 1990s, as the internet grew in popularity, web-based interfaces replaced traditional methods. Then, in the middle of the 2000s, smartphones and tablets appeared, leading to the era of touch-based interfaces and radically changing the ways in which we engage with electronic gadgets. The road map of UIs development over the years is depicted as below: The advancement of modern technology like AI, Internet of Things (IOT), Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR) is now leading us to a new generation of Uls. These modern technologies are blurring the distinction betw....
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....39;ble Supreme Court in the case of Collector of Customs & Central Excise v. Lekhraj Jessumal & Sons [1996 (82) E.L.T. 162 (SC)] as held that words in the traffic schedule need to be interpreted by considering the rapid development of technology as the industry cannot be static. The Hon'ble Supreme Court held as follows: "3. The High Court in the impugned order noted that the stand of the Customs authorities was that the words "switches, miniaturized" as component parts of hearing aids should be understood to mean only those types of switches which were generally used in the manufacture of hearing aids at the time of publication of the Import Policy for the relevant year, namely 1977, and that these words could not be said to include any other type of switch, even if such other type of switch could be used in the manufacture of hearing aids. The Division Bench observed, in our view, very rightly, that such an interpretation overlooked that industry was not static and that there was continuous technical progress therein. New processes and new methods developed from time to time and new material and components or types of components superseded others. It was unreasonable....
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....l within the scope of Chapter Heading 8471 (Automatic data- processing machines and units thereof, magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included), in accordance with Chapter Note 6(A) to Chapter 84 and Explanatory Notes to CTH 8471. 6.4 Now, I take up the matter of classification of the kitted accessories namely Dual Loop Band, Solo Knit Band and Light Seal for Apple Vision Pro under CTH 8473 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472) as claimed by the applicant. Upon reviewing the text of heading 8473, it is evident that parts and accessories specifically designed for use solely or principally with machines classified under headings 8470 to 8472 must be classified under this heading. Therefore, it is necessary to determine whether the items in question namely, Dual Loop Band, Solo Knit Band, and Light Seal can be classified as parts or accessories of the Apple Vision Pro. 6.4.2 The applicant submitted that the Dual Loop Band is designed to securely hold....
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....ess of but not essential to the main machinery". According to Chapter 11 (Definitions) of the Foreign Trade Policy (FTP) 2023, "Accessory" or "Attachment" means apart, sub-assembly or assembly that contributes to efficiency or effectiveness of a piece of equipment without changing its basic functions. In light of the above, it can be understood that a "part" is a component of equipment or machinery that is essential to its functioning. In other words, a "part" is an integral element of the machinery or equipment, without which the product cannot operate. On the other hand, an "accessory" is something that enhances the convenience or effectiveness of the machine, but it does not contribute to its core functioning. 6.4.4 Therefore, it is essential to examine whether the Dual Loop Band, Solo Knit Band, and Light Seal fall under the definition of "part" or "accessory" for the Apple Vision Pro. Based on the applicant's submission and the technical specifications of these products, it becomes clear that these items are not essential for the fundamental functioning of the Apple Vision Pro. The core operations of the Apple Vision Pro, such as its primary display and process....
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....ings. In the present case, the Dual Loop Band, Solo Knit Band, and Light Seal are designed with specific features, characteristics, and functions that make them suitable only for use with the Apple Vision Pro. Their design, material properties, and purpose are all tailored to complement the Apple Vision Pro's features, enhancing user comfort, fit, and usability. These accessories, by their very nature, are not meant to serve any other purpose outside of their association with the Apple Vision Pro. For example, the Dual Loop Band and Solo Knit Band are crafted to fit securely around the Apple Vision Pro and adjust according to the user's head shape, ensuring a comfortable fit during extended use. The Light Seal is specifically designed to prevent light leakage while enhancing the viewing experience in conjunction with the device. These features are uniquely suited to the Apple Vision Pro, and their specific design and function would not be applicable or useful for other devices. Further, the Dual Loop Band, Solo Knit Band, and Light Seal are accessories specifically designed for the Apple Vision Pro. Each of these items serves a distinct function that enhances the usab....
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....ased script technology (GIST) cards for multilingual computers 8473 30 99 --- Other 8473 40 Parts and accessories of the machines of heading 8472: 8473 40 10 --- Parts of duplicating, hectograph or stencil machines 8473 40 90 --- Other 8473 50 00 - Parts and accessories equally suitable for use with the machines of two or more of the heading 8470 to 8472 On perusal of the above entries, it is clear that the single dash (-) entry 8473 30 covers "Parts and accessories of the machines of heading 8471" which is further sub-divided. Further, under the CTSH 847330, there is no specific entry at the eight-digit level which covers the aforesaid goods. The CTI 8473 30 99 is a residuary heading which covers "other" parts and accessories of the machines of heading 8471. Thus, the kitted accessories namely Dual Loop Band, Solo Knit Band, and Light Seal are classifiable under the residuary entry of CTI 84733099 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472- Parts and accessories of the machines of heading 8471 --- Other ---- Other) of the ....