TaxTMI 
TaxTMI 
2023 (12) TMI 1495
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....f Interactive Flat Panel (All-in-one computer system) and intended to import the said goods having Model Name "View Board IFP6532-2, IFP8652-1A, etc. under the port jurisdiction of the Commissioner of Customs (Import), Seaport Custom House, 60, Rajaji Salai, Chennai - 600001. The present Application relates to proposed classification of the above said goods Interactive Flat Panel (All-in-one computer system) under HSN code 84714190 of Customs Tariff Act, 1975. 2.1. The applicant is a registered private limited company involved in the business of trading. The applicant is also registered under the GST bearing Registration No .- 19AADCS5971L1ZP. The applicant is intending to import Interactive Flat Panels (Model Names - ViewBoard IFP6532-2, 7532-2, 8632-2, IFP6552-1A/ IFP6552-1B, IFP7552-1A/IFP7552-1B. IFP8652-1A/IFP8652-1B, ViewBoard 6550-5, 7550-5, 8650-5 (herein after referred as subject goods) from China. The subject goods are an All-in-one (AIO) Computer System, function like a large size tablet computer, and has an inbuilt Mother Board, ARM Quad Core Cortex Processor, Micro Processor (CPU), Graphics Card, 4GB/8GB RAM, and 32 GB/64GB ROM. It also has an Embedded Android syste....
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....ne Computer System" has been defined as follows, "An All In One (AIO) Computer system is a type of computer which has all the parts of a computer like CPU, memory (RAM storage) motherboard, graphic processing using or graphic card, all in one placed inside the monitor's body". The subject goods also consist of all the parts of a computer like CPU, memory (RAM+ storage), motherboard, graphic processing using or graphic card, all in one place, inside the display's body. Like a Tablet computer system, the subject goods also typically come with a mobile operating system and touch screen display processing circuitry, and has two classes of Operating Systems, i.e., Mobile Operating System like Android 9.0 (Oreo), and Desktop Operating Systems Microsoft Windows, like Apple Mac and Chrome OS. In other words, the subject goods are All in One (AIO) Computer System, and functions like a large size tablet computer. D. Chapter 8471 of the Customs Tariff Heading deals with the classification of automatic data processing machines and units thereof. The Chapter Note 5 of 8471 is as follows: 5(A) For the purposes of heading 8471, the expression "automatic....
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.... NOT ELSEWHERE SPECIFIED OR INCLUDED 8471.41 -- Comprising in the same housing at least a central and output unit, combined; processing unit and an input whether or not 8471.41.90 --- Other The subject goods are having all the essential features required for it to be classified under the CTH 8471 4190 as an "Automatic Data Processing Unit comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined, other than a microcomputer and a Large or main frame computer". F. The identical products namely Creative touch 5-series Interactive Flat Panel (IFP), the Hon'ble Authority, Mumbai, vide Ruling No. CAAR/Mum / ARC / 15/2022 dated 03.06.2022 and vide Ruling No. CAAR / Mum / ARC /04/2022 dated 02.02.2022 had held that the product is classifiable under CTH 8471 4190. The said ruling is applicable to the present case also, as the ViewSonic Interactive Flat Panels are similar to the product that was under consideration before the Hon'ble Authority in the above- mentioned Rulings and requested to hold the subject goods classifiable under CTH 8471 4190. Comments of the filed formation 3. The c....
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....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 solely or principally used in an automatic data processing system; (ii) it is connectable to the central processing unit either directly or through one or more other units: and (iii) it is able to accept or deliver data in a form (codes or signals) which can be used by the system. Separately presented units of an automatic data processing machine are to be classified in heading 8471. However, keyboards. X-Y co-ordinate input devices and disk Storage units which satisfy the conditions of (ii) and (iii) above, are in all cases to be classified as units of heading 8471. (D) Heading 8471 does not cover the following when presented separately, even if they meet all of the conditions set forth in paragraph C): (i) printers, copying machines, facsimile machines, whether or not combined; (ii) apparatus for the transmission or reception of voice, images or other data, includin....
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....uns on Operating System/Software can be installed by the user. As per Explanatory Notes to Chapter 84, the 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. b. The goods under import does not support to be re-programmed, therefore, user would not be able to run logical program on the device (for example, the device does not support run of a simple sum of two numbers' program written in C, C++, Java or any other programming language). An automatic data processing machine (ADPM) process data in coded form. A code consists of a finite set of characters (binary code, standard six-bit ISO code etc.) c. Chapter note 6(A)(iv) provides that "executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during processing run" and as per the catalogue and function mentioned of the goods, it is evident that these goods cannot execute the logical functions without human intervention. A theorem-prover refers to a computer program that has been designed to solve ....
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....mple to a group of students in a classroom or during a meeting in a business environment. 3.1.7. It is also observed as per Note 6(D) to Chapter 84, Heading 8471 does not cover the 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, instrument 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. 3.1.8. 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 as per the intended use i.e., training, conferences, educational purposes, teaching via e-learning etc. The goods are mainly Display devices incorporating and working in conjunction with an automatic data processing machine i.e., inbuilt CPU. Therefore, the primary function of the goods is to display the given input data/ images/pictures/videos etc. ....
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....and even web links on a larger scale. 3.1.14. Further, Chapter Note 3 to Section XVI states that "Unless the context otherwise requires, composite machines consisting of two or more machines filled to form a whole and other machine designed for the purpose of performing 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". I find that the primary function of the subject goods is display and are also marketed as products with efficient display qualities, touch screen, write or draw on screen etc. 3.1.15. The Hon'ble Supreme Court in the case of Commissioner of Customs, Bangalore Vs. N.L. Systems (India) P. Ltd .- 2010 (256) ELT 173(SC) held that PXI Controller which was a computer based instrumentation product and capable of being controlled by a Personal Computer/Laptop but is not a PC/laptop-principal function of controllers is executing, control, algorithms for real-time monitoring and control of devices controller performs functions in addition to data processing what is imported is a system containing on ADPM and if the contention of the importer ....
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.... Departmental comments dated 08.11.2023, which are as follows: 4.1. Chapter Note 5 (A) and the HSN Explanatory Notes to CTH 84.71 provides, what should constitute an Automatic Data Processing Machines (ADPM). According to the aforesaid Chapter Note 5(A), ADPM would be a machine which is capable of storing a processing program; is freely programmable; performs arithmetical computations; and can execute a processing program by logical decision during the processing without human intervention. The subject goods are IFP having an in-built CPU (ARM quad-core Processor), a 4GB RAM and Android 9 / View Board Operating software. In addition, they also have an internal storage capacity of 32GB. 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. The goods come with a pre-installed operating system, namely, Android 9/View Board Operating Software. The said Android version/View Board 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 a....
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....6. In terms of tariff items contained in Chapter 85 and the HSN Explanatory Notes to CTH 8528, it is more than apparent that CTH 8528 would cover monitors which are capable of receiving and displaying the signals when attached to any of the devices like ADPM, video camera or recorder. Such monitors do not have the capability of functioning independently or through two-way communication. They are also not capable of processing any data on their own, nor are they capable of storing any data. 4.7. Identical goods have also been classified under CTH 8471 by the Principal Bench of the Hon'ble CESTAT in the case of Ingram Micro India Pvt. Ltd. Vs. Principal Commissioner of Customs (Import), ICD, Tughlakabad [Final Order No. 50076-50077/2022 dated 02.02.2022] and also by the US Customs Cross Ruling and WCO Classification Ruling. 4.8. It is submitted that for an identical product, the Authority for Advance Ruling, Telangana in the case of In Re: Next Education India Pvt. Ltd. reported in 2022 (60) GSTL 483 (A.A.R. - GST- Telangana) has held that Interactive Flat Panel with android is classifiable under CTH 8471. 4.9. The goods would not merit classification under CTH 8528 sinc....
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....erefore, the product in question was required to be connected to a PC or projector, whereas the product under consideration in the present case has an in-built CPU and is not required to be connected to a PC or projector to be used. It has independent functionality. 4.12. Therefore, for the reasons mentioned in the application for advance ruling and for the reasons mentioned above, it is prayed that the product under consideration, namely, "ViewSonic Interactive Flat Panel (IFP) (Model 1A/IFP6552-1B, ViewBoard IFP7552-2, 7532-2,8632-2, IFP6552- IFP7552-1A/IFP7552/1B, IFP8652- 1A/IFP8652-1B, ViewBoard IFP 6550-5, 7550-5, 8650-5))" is classifiable under CTH 8471 4190. Records of Personal Hearing 5. A personal hearing in the matter was held on 17.11.2023. The advocate / authorized representative started by introduction of the applicant company, in brief. He submitted that the subject goods are an All-in-one (AIO) computer system, functions like a large size table computer and has an inbuilt Mother Board, ARM Quad core Cortex Processor, Micro Processor (CPU) Graphics Card, 4GB/8GB RAM and 32 GB/64 GB ROM and having an Embedded Android systems Pre-loaded with android 9 Operatin....
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....ndition given in 6(A)(ii) of the chapter notes. ViewSonic Interactive Flat Panel, perform the arithmetical computations specified by the user which satisfy the condition 6(A)(iii) of the chapter notes. It is submitted that the subject good has a processing program, which makes it capable of modifying their execution by logical decision during the processing run, so satisfies the condition 6(A)(iv) of the chapter notes. In other words, the subject good fulfills all the conditions of 6(A) of the chapter notes, and thereby qualifies to be covered by the definition of Automatic Data Processing (ADP) machine. 6.3 Further, the subject goods house, in addition to a Central Processing Unit (CPU), a LED Screen, which serves as the output source, and a touch-sensitive surface, which acts as the source of input. In a similar matter involving the classification of flat panel display, reported in NY N2800009 dated 31.10.2016, the National Commodity Specialist Division, United States, has held that the flat panel display, which is freely programmable and houses a CPU, and an input unit and/or an output unit shall be classified under 8471.41.0150 of the Harmonized Tariff Schedule of the United....
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....f 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. 6.5 Based on the comments of the concerned Commissioner of Customs, Chennai, on the application for advance ruling, it is observed that classification under heading 8528 instead of claimed classification under heading 8471, has been preferred mainly for the reasons that, Interactive Flat-Panel Display (IFPD) is a large-format touchscreen display ideal for meeting rooms and collaborative spaces; in a nutshell, an IFP-short for Interactive Flat Panel Display-is a type of interactive whiteboard (IWB); as per Note 6(D) to Chapter 84, heading 8471 does not cover the 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 th....
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....e of WCO decided the classification of this product under Sub- heading 8471.60, adopting the classification rationale under General Rules for Interpretation vide Rule 1 read with Note 5 (C) to Chapter 84 and Rule 6 of GRI. 6.8 As regards the products namely Creative touch 5-series Interactive Flat Panel (IFP), the Hon'ble Authority, Mumbai, vide Ruling No. CAAR/Mum/ARC/15/2022 dated 03.06.2022 and vide Ruling No. CAAR/Mum/ARC/04/2022 dated 02.02.2022 had held that the product is classifiable under CTH 8471 4190. The said ruling is applicable to the present case also, as the ViewSonic Interactive Flat Panels are similar to the product that was under consideration before the Hon'ble Authority in the above-mentioned Rulings. 6.9 I also note that a number of rulings and judgements have been quoted by the concerned Commissioner to justify classification under heading 8528. However, it is felt that judgement of CESTAT, New Delhi in the case of Ingram Micro India Private Limited is the most appropriate, giving detailed explanation for classification of goods similar to the subject goods under heading 8471. Hon'ble CESTAT, New Delhi in Customs Appeal No. 50708 and 50709 o....