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TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 514
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....pplicant has filed application for obtaining Advance Ruling on classification and duty structure for product to be imported, viz., Alesea Reel Tracking Device. 2.2 The subject device will be utilized for the purpose of ensuring continuous & timely installation of cables, which the industry often finds it difficult to address. This is achieved by active focus on cable-drum management which is possible only by affixing the subject device on cable drums. The device is capable of the following things: (i) Track the amount of cable consumed and the remainder length of cable available on the drum, identified as active cable-metering .. (ii) Detect any collision or major damage to the cable-drum during installation with an exact date and time. (iii) Monitor temperature of cable-drums when in use during installation or when idle in storage. (iv) Identify location of the cable-drums at any place or point in time for tracking and geo-fencing to restrict cable-drums to a certain location. (v) Transmit real-time data on the above for assimilation and processing to provide impactful insights. On account of its above capabilities, the subject de....
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....al thermometer. vi. Modem is used to establish communication between the subject device and host platform used by stake-holders through the use of multi-network connections such as Long-Term Evolution (LTE) Cat M1, LTE Cat NB, and Enhanced General Packet Radio Service (EGPRS). Subject device can also utilize multi-carrier connectivity and features automatic selection. This machine-to-machine communication is established for the sole purpose of transmitting all the crucial accumulated data to the host platform. Continuous transmission helps stake-holders obtain real-tile feedbacks for and impactful insights for advance decision making and inventory management. Alesea Reel Tracking Device is multifunction inventory management device, the core purpose of the which is tracking speed of cable installation. It is also supported by other features that tracks sudden shocks, location and temperature. Simpler devices feature only GPS Tracking or Telematics, while complex multifunctional devices such as Alesea include additional integrated components that function to obtain data that is specific to the needs of end-user. 4. Classification of subject goods interpretation of Law ....
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....subject device to be classified as a machine that performs all the three aforesaid functions. However, deciding on classification by emphasizing on a single component as principal component in line with GRI 3(b) must be refrained as the subject device performs multiple functions through its multiple components, which are all vital in its own right. There would be no point of collection of data by utilizing multiple sensors if the same could not be converted and transmitted through the modem on real-time basis. Similarly, the subject device would be redundant if it could perform only the function of transmission without any data collected or available to transmit. Hence, each of the components - Gyroscope, Accelerometer, Digital Compass, GPS, Internal Thermometer, and Modem - all perform essential functions to provide real- time information that contributes equally for facilitating active inventory management for all stake- holders involved. Whereas GRI 3 (c) provides that when goods cannot be classified with reference to GRI 3(a) & 3(b), then the goods be classified in the heading that occurs last in numerical order. Given that each of the components can be classified in thei....
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....entory control, geofencing and theft, helping in optimization of usage. Thus, all the functions performed by the device are equally important. Without wireless transmission of the information collected and converted to readable/language understood, the entire operation would require immense manpower to process in remote and harsh environment conditions and yet it would not be able to raise any alarm for theft within the shortest of time (in real time). Hence considering the versality of the device, classification based on GPS under HSN 85269190 is ruled out and more suitable classification under 85176290 or 90318000 may be considered. The suppliers classify the goods under HS code 85269180 (85269190 in India) as Radio Navigational aid apparatus due to its GPS functionality. There is no Customs duty advantage in classification of goods under 8517 or 9031 or 8526, hence it is revenue neutral exercise. 8. Further, as per product Catalogue the subject goods i.e. 'Alesea Reel Tracking Device' is an advanced IoT-enabled cable drum management solution that integrates GPS tracking, environmental sensors, motion detectors, and mobile communications (GPS + GSM triangulation)....
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.... Accelerometer - Detects linear motion, vibrations, and sudden shocks during transportation or installation, helping monitor impacts or collisions affecting the cable drum. iii. Digital Compass - Measures the Earth's magnetic field to determine direction relative to magnetic north. Working in coordination with the gyroscope and accelerometer, it helps generate an accurate full-motion profile. iv. Global Positioning System (GPS) - Tracks the real-time location of cable drums for logistical monitoring, proof of delivery, and geo-fencing within designated installation sites. It supports integrated global navigation and multi-system geo-tracking. v. Internal Thermometer - Monitors temperature conditions during storage, transportation, or installation, particularly useful for operations in remote locations. vi. Modem - Enables machine-to-machine communication with the host platform using multi- network connectivity (LTE Cat M1, LTE Cat NB, EGPRS) and multi-carrier support. It ensures continuous transmission of data for real-time monitoring, decision-making, and inventory management. 12.1 I observe that, as per the product catalogue, the subject....
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....s performing diverse functions. For classification of such composite goods, the principal function of the device must be determined. In this regard, Note 3 to Section XVI provides: "Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole, and other machines designed to perform 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." Additionally, Rule 3(b) of the General Rules for Interpretation (GRI) states: "Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to Rule 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable." 14. Applying the above, the 'Alesea Reel Tracking Device' is a composite device performing multiple functions. In terms of Note 3 to Section XVI and Rule 3(b) of the GRI, classification of such goods is determined b....
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....gational apparatus. Therefore, the essential and dominant function is radio-based determination of geographic position. 19. All these features are fundamentally dependent upon the Global Positioning System (GPS) module. The GPS functionality enables determination of latitude and longitude by receiving radio signals from satellites, which is the bedrock of the device's operation. Without the GPS-based radio navigational capability, the device would not achieve its primary objective of tracking and locating cable drums across territories. The other components - gyroscope, accelerometer, thermometer, and modem - are auxiliary and supportive in nature. They enhance the data profile (such as rotation, shock, or temperature) and facilitate transmission to the host platform. However: * The modem merely enables communication of already determined data. * The sensors provide supplementary operational metrics. * None of these functions independently define the commercial character of the product. 20. The transmission module merely enables relay of information generated by the device's core system. Communication is thus a supporting feature rather t....
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.... interpreting the General Rules for Interpretation and Section XVI Note 3. 22.1 In Commissioner of Customs v. Maestro Motors Ltd. 2004 (174) E.L.T. 289 (S.C.), the Hon'ble Supreme Court held that where various components together constitute a complete article, classification must be determined on the basis of the essential character of the goods as a whole. Similarly, in Union of India v. Tarachand Gupta & Bros., reported in 1983 (13) E.L.T. 1456 (S.C.), the Apex Court held that goods imported in disassembled or composite form are to be classified according to the essential character of the complete article, and not by examining individual components separately. These decisions thus establish that, for classification purposes the essential character of the goods as a whole is the determining factor. 22.2 Further, in Annapurna Carbon Industries Co. v. State of Andhra Pradesh, the Hon'ble Supreme Court held that the functional utility and dominant use of a product must guide classification, and that a product cannot be classified based on a subsidiary or incidental feature when its primary character is clearly identifiable. Thereby, applying the ratio of the above de....