TaxTMI 
TaxTMI 
2024 (4) TMI 1386
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....ey are a registered private limited company which is engaged in the distribution of Information Technology and Telecommunication products. They intend to import 05 models of Interactive Display System (View Board) from their related supplier, ViewSonic International Corporation, and sell it further to their distributors/consumers. The details of the Product in question are as below: Sr. No Name of the Product Sr. No Name of the Product 1. VIEWBOARD IFP- 105S 4. VIEWBOARD IFP-8633 2. VIEWBOARD IFP-6533 5. VIEWBOARD IFP-9850-4 3. VIEWBOARD IFP-7533 2.1 The subject goods, also known as Interactive Flat Panel, comprise of Liquid Crystal Display panels with LED backlight. They have an in-built Central Processing Unit and RAM for execution of programs. They have pre-installed operating system, namely, Android 7.0 that is customized for the subject goods, along with an Open Pluggable Specification Slot, thus enabling the user to download and install new programmes and operate other operating systems like Windows etc. The detailed specification of products is provided in Annexure attached to the CAAR-1 application. 2.2....
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....processing unit and an input and output unit, whether or not combined : 8471 41 10 --- Micro computer 8471 41 20 --- Large or main frame computer 8471 41 90 --- Other 8471 49 00 -- Presented in the form of systems Note-6 appended to Chapter 84: 6.(A) For the purposes of heading 8471, the expression "automatic 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 data processing machines may be in the form of systems consisting of a variable number of separate units. (C) Subject to paragraphs (D) and (E), a unit is to be regarded as being part of an automatic data processing system if it meets all of the following conditions: (i) it is of a kind sol....
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...., per se, as a video monitor and television receiver of the heading 8528 of the Schedule. It may not be out of place to mention here that as per the HSN Explanatory Note (a) below the Heading 85.28 which inter alia covers Video Monitors, this Heading excludes "Display Units of automatic data processing machines, whether or not presented separately (heading 8471)". The classification of the product under consideration which is found to be a display unit of an automatic data processing machine would therefore be only under Heading 8471. 3.3 The applicant states that Commercial Touch Display, Commercial Display (ADPM) And Video Display Units are monitors used with Automatic Data Processing (ADP) machines. Monitors used along with ADP machines were classified till 31.12.2006, under heading 8471 of the First Schedule to the Customs Tariff Act, 1975. Due to HS 2007 changes brought into effect from 1.1.2007, such monitors are presently classifiable under sub heading 852840. However as per Customs Circular No. 33/2007-Cus dated 10.9.2007 all types of monitors and projectors which are solely or principally used with an ADP machine were extended with exemption of customs duty vide SI. No.....
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....play (ADPM) and Video Display Units" with common name of "VIEWBOARD IFP" - consisting of 5 models" are being Monitors used with Auto Data Processing Machine. In this regard, the applicant contended that as ADP machine is covered under the sub headings 852841(Cathode Ray Tube Monitors), 852851(Other types) and 852861 (Projectors) and are extended with exemption, the same should be classified under heading 8471 as was held in the case of Compuage Infocom Ltd. [(2023) 2 Centax 273 (A.A.R .- Cus .- MUM.)] and since, the subject goods being an automatic data processing machine/units, cannot be used as video monitor and television receiver under Heading 8528 of Customs Tariff Act, 1975. Accordingly, it has been claimed that these goods are classifiable under CTSH 84714190 and also eligible for exemption under Ntfn No. 24/2005- Cus as per Board's Circular No. 33/2007 Cus dated 10.09.2007. However, the contentions of the applicant appear incorrect in view of the followings: 4.1.1. The main heading of CTH 8471 covers "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 ....
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....v. monitors and projectors, not incorporating television reception apparatus. (E) Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings, 4.1.3 It is observed that an Interactive Flat-Panel Display (IFPD) is a large-format touchscreen display ideal for meeting rooms, class rooms and collaborative spaces. It is a replacement for clunky or outdated projector technology with a higher-quality display, enhanced connectivity, and built-in software solutions. These solutions are perfect for business opportunities, educational pursuits, and even at home leisure. In a nutshell on IFPD- short for Interactive Flat Panel Display-it a type of interactive whiteboard (IWB). An IWB is a large electronic display that has a touchscreen and is able to access, manipulate, and interact with electronic files. They easily and beautifully handle the highly collaborative needs of today's office space with 20 points of touch and wide viewing angles with options for ultra- fine 4K res....
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.... input or output device and is to be identified with its primary function of display by applying Note 6 (E) of Chapter 84 Note as mentioned above. 4.1.8. As per Rule 1 of the General Rules for the interpretation of the Harmonized System, the titles of Sections, Chapters and sub-chapters are provided for case of reference only, for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the provision stipulated therein. 4.1.9. Further, Rule 3(a) states that 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. 4.1.10. The appropriate heading for classification of the impugned goods therefore shall be 8528 whic....
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....ere rightly classified under Chapter 90. The same principle applies to this case. 4.1.14. Hon'ble Supreme Court in the case of Deena Jee Sansthan vs Commissioner of Central Excise, Meerut-2019 (365) ELT 353 (SC) held that the classification of product should be by applying common parlance test that the said product i.e., "Shampoo" is used as cosmetics only and not as ayurvedic medicament even though the product has all the ingredients mentioned in books on ayurveda listed in Drugs and Cosmetics Act. 4.1.15. In view of the above, the subject goods cannot be considered as an Automatic Data Processing machine under CTH 8471. It is pertinent to mention here that even Cellular Android Phones do incorporate all the functions of an ADP Machine and also works on Android OS, yet the same is classified under cellular phones as the primary function is communication. Applying the same analogy, the principle function of the item under import is to interact through display and hence the impugned goods are classifiable under sub- heading 8528 5900 which deals with other monitors. 4.1.16. In case of Commissioner of Customs (Import & General), New Delhi Vs Integral Computer Lid 2016 (337) ....
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....a number of rulings on identical goods issued by advance ruling authority of Mumbai and Delhi in support of their contention. 7. I have perused the records of the case - CAAR-1 application, reply from jurisdictional Commissionerate, rejoinder of the applicant, oral submissions made during the hearing and the legal framework governing the classification of proposed imports in the form of relevant Chapter notes, Section notes and HISN Explanatory Notes to the respective Chapter headings. I proceed to deliberate upon the issue on the basis of information available on record. The subject goods, 'Interactive Display System (View Board)' has an in-built Central Processing Unit, RAM for execution of programs, pre-installed operating system namely Android 7.0, Open Pluggable Specification Slot to download and install new programmes and operate other operating systems such as Windows, etc. Additional features include, slots for HDMI, VGA, LAN, USB, RS232 and audio ports, high internal storage capacity, UFT (Ultra Fine Touch) Technology to offer more precise writing and faster processing time, air quality sensor, germ resistant screen, two touch pens (stylus), remote control, 70-80% glare....
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....ng 8471 does not cover monitors and projectors not incorporating television reception apparatus when presented separately even if they meet all the conditions mentioned in Para(C) of the said Note. Further, para (E) states that machines, instruments or apparatus incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings. iv. The description mentioned in the application is "Interactive Flat Panel", thus the main function of subject goods is interaction through display. Essentially, it acts as a display monitor, enabling one to select, to view documents, videos and even web links on a larger scale. As per jurisdictional Commissionerate, Chennai II, the impugned goods cannot be considered as an Automatic Data Processing machine under CTH 8471, instead they are classifiable under sub-heading 8528 5900 which deals with other monitors. 7.2 The applicant provided a rebuttal in response to the comments from jurisdictional Commissioner of Customs, Chennai-II(Import). 7.2.1 ....
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....) 2 Centax 62 (Tri .- Del.)] iv. In RE: Next Education India Private Limited [2022(60) G.S.T.L 483 (A.A.R- GST-Telangana)] 8. I have examined the comments forwarded by Commissioner of Customs, Chennai- II(Import) and the rejoinder submitted by the applicant. It is observed that the Jurisdictional Commissionerate has described the subject goods as 'Interactive Flat-Panel Display (IFPD)' that is a large-format touchscreen display ideal for meeting rooms and collaborative spaces; that is a replacement for clunky or outdated projector technology with a higher-quality display, enhanced connectivity, and built-in software solutions; that in a nutshell it is a type of interactive whiteboard whose main function is interaction through display; that the subject goods are not merely an ADPM and in fact it has many other additional inbuilt features with the main purpose to interact through display; that they are mainly display devices incorporating and working in conjunction with an automatic data processing machine i.e. inbuilt CPU; that the primary function of the goods is to display the given input data/images/pictures/videos etc. They have placed emphasis on the following Chapt....
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....ication under heading 8471, it is clear that subject goods need to satisfy the requirements of note 6(A) to chapter 84. Therefore, there is a need to examine whether the features and specifications of the subject goods under consideration meet the criteria as laid down in the relevant chapter note cited above. 8.2. It is understood that Automatic data processing (ADP) machines have storage capability and also stored programs which can be changed as per the performance of tasks. Digital machines process data in coded form. A code consists of a finite set of characters (binary code, standard six-bit ISO code, etc.). The data input is either automatic through the use of data media such as magnetic tapes or manual by means of keyboards, touchscreen etc. The input data are converted by the input units into signals which can be used by the machine and stored in the storage units. The data is then operated by the CPU and operating system to produce output. It is evident that these machines have an in-built CPU. Android operating software and high internal storage capability which is directly accessible for the execution of a particular program, and which has a capacity sufficient to st....
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....ble with the various Android operating system, join wired or wireless networks, access and manipulate folders and files, and perform general computing tasks such as Internet browsing, email, and editing office documents. Therefore, from the working and features of the impugned goods, it appears that these are neither units of ADP machines nor ADP machines presented in the form of systems, but ADP machines themselves. 8.4 ADP machines are categorized in CTH 8471 as per one dash subheading as follows: 1st one-dash subheading: Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display. 2nd one-dash subheading: Other automatic data processing machines As the machines under consideration do not have a keyboard, they appear to be classifiable as other ADP machines under 2nd one-dash subheading. Subheading 847141 covers other ADP machines; comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined. For the machines under consideration, the LED screen satisfies the requirement for output and the touchscreen satisfies....