AI Drafter 
TaxTMI 
TaxTMI 
2024 (12) TMI 1737
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....Original Design Manufacturer (ODM) engaged in the manufacture of various Information & Communications Technology (ICT) products, supporting peripherals, accessories etc., for many Brands in India. As part of its portfolio of various ICT Products, the Applicant intends to manufacture & assemble Interactive Flat Panels (IFPs). About the imported goods 1.2 For this purpose, the Applicant is proposing to import different parts of IFPs for manufacture & assembly in India. The details of different parts proposed to be imported are tabulated below: SI. No. Parts Name Functions 1 Power Cable Power cable is an electrical cable, an assembly of one or more electrical conductors, usually held together with an overall sheath. The Power cable is used for transmission of electrical power from the source to the IFPs. 2 Mother Board A motherboard is the control unit i.e., main printed circuit board (PCB) of the IFP. The motherboard is a IFP's central communications backbone connectivity point, through which all components and external peripherals connect. The specific functions are listed below: * Capabilities: The motherboard is designed for high- perf....
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..... These devices are particularly useful for pointing out specific details on slides, guiding the audience's attention, and enhancing the overall flow of the presentation. 1.3 It is to be noted that these parts will be imported in definite quantities and matching sets as part of one consignment. Post import, these will be assembled into complete IFPs in India. A brief process of assembly, testing and packaging is provided below: * Unpacking and loading to conveyor: Components will be unpacked from the carton box and placed on the roller conveyor for assembly purposes. * Checking the components: Visual inspection will be carried out to confirm whether all components are available. * Checking for damage: Inspection will be carried out for any physical damage, followed by clicking of pictures. * Removing all back cover mounting screws: Disassembly process will be carried out by removing the back cover mounting screws. * Unwrapping all connecters for mother board and power board connection: All cable connectors fixed on the frame will be removed. * Inserting mother board, power board by use of screws: Mother board and power bo....
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....e IFPs will also have HDMI/DP or USB C type slots permitting multiple devices to be connected with these IFPs. In addition to Wi-Fi connectivity, these will also be equipped with an additional port to support a stable, secure internet connection. A user will be able to load and execute a program through these ports. The optional OPS slot option in the IFPs will also allow downloading and installing new programmes by the user to customise the system as per their needs. The IFPs will come with pre- installed Whiteboard Software which will allow users to collaborate both on-site as well as remotely. The presence of Smart Whiteboard Software will allow users to make notes either using fingers / stylus and even permits multiple users to write together, compare notes, etc. The IFPs will also support a user-friendly interface allowing users to organise documents and customise device settings. These systems will also be preloaded with various widget options, screen and voice recorder, calculator, calendar, etc. The IFPs will have various ports available USB Type 2.0, USB 3.0, HDMI port, VGA In, etc. Through these ports, a user will also connect the IFPs with other devices. Besides providin....
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....from the Authority in respect of any goods prior to its importation. In the instant case, the Applicant is filing the present Application to seek a ruling on the appropriate classification of proposed import of parts of 35 Models of IFPs. For clearing the goods from the port, and determining the liability to duty, it is essential to identify the correct classification under which these goods would be classified. Therefore, the Applicant, being desirous to know the correct classification of parts of IFPs, is filing the present application seeking an advance ruling as to the classification of parts of IFP proposed to be imported. The Applicant has not imported the parts of such IFPs from any of the ports in India till now. The questions on which an application for an advance ruling can be made have been provided under Section 28H of the Customs Act. 1.12 As per Section 28H(2) of the Customs Act, of questions relating to classification of goods under the Customs Tariff Act, 1975 ('Customs Tariff'). The relevant portion of the Customs Act has been extracted below for ease of reference: "SECTION 28H. Application for advance ruling. - (1) ... (2) The....
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....any authority/court. Thus, the bar under Section 28I(2)(a) of the Act above will not apply. Thus, the present application must be allowed to be proceeded with. Issues requiring Advance Ruling 1.16 In view of above, the Applicant is seeking an Advance Ruling on whether "Parts of IFPs i.e., Power Cord, Mother Board, HDMI Cable, Panel Unit + Housing Assembly, Power Board, Remote Control, Stylus Pen, Telesonic pointer, and USB Cable" imported in matching sets and definite quantities will be classifiable as: (i) Automatic Data Processing Machines under Custom Tariff Item (hereinafter referred to as "Tariff Item") 8471 41 90 of the Customs Tariff; or (ii) Parts and accessories suitable for use solely or principally with machines of headings 8471, under Tariff Item 8473 30 99 of the Customs Tariff; or (iii) Other Monitors under Tariff Item 8528 59 00 of the Customs Tariff? Classification of parts of IFPs proposed to be imported in matching quantities. 1.17 The Applicant intends to import parts of 35 models of IFPs in matching quantities as part of one consignment. These parts will be assembled in India post importation to make complete IFPs before se....
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....mbled or disassembled." 1.20 The relevant extracts of Harmonized System of Nomenclature (hereinafter referred to as "HSN") Explanatory Notes to GI Rules have also been reproduced hereinunder: "RULE 2 (a) (Articles presented unassembled or disassembled) (V) The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport. (VI) This Rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of this Rule. (VII) For the purposes of this Rule, "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved. No account is to be taken in that regard of the complexity of the assem....
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....chine without clamping units. The goods had been imported in SKD condition. The Hon'ble Tribunal held that mere absence of clamping unit would not affect the classification of the goods, which were in semi-knocked down condition, by application of GI Rule 2(a). For assessment, the goods were to be treated to be complete machines classifiable under Tariff Item 8477 10 00 of the Customs Tariff. 1.24 In the case of Ajanta Ltd. v. Commissioner of Customs, Kandla, 2019 (370) E.L.T. 308 (Tri. - Ahmd.), wherein it was held that an incomplete fan imported in SKD form without the fan blade will be classified under Tariff heading 8414 as an electric fan. The relevant extracts are as follows: "It is seen that Customs Tariff headings include within purview the items incomplete, unfinished where presented unassembled or disassembled, if the said have the essential character of finished goods. In the instant case, from the observations given by the original adjudicating authority, it is seen that all parts of the fan except the fan blades as a set. The packing also describes the goods as electric fan. The rotors and stators, down case, top case and down rod of motor are also desi....
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....ase of Mitsubishi Electric India Pvt. Ltd. 2023 (383) E.L.T. 224 (A.A.R. - Cus. - Del.), while classifying air-conditioner kits containing all essential parts/components of assembly, including cooler or condenser or evaporator presented together in CKD condition for assessment and clearance, it was held that as per GI Rule 2(a), such kits in CKD condition, including parts of evaporator or condenser have acquired the essential character of an air- conditioner. Thus, it would merit classification as air-conditioning machine under sub-heading 8415 10/8415 81/8415 82/8415 83 of Customs Tariff. On a bare perusal of the above cases, it is evident that the Courts and Tribunals have applied GI Rule 2(a) for classification of goods imported in CKD/SKD form, even in the cases wherein the imported goods did not constitute the complete finished goods (e.g., Electric fan without fan blades) but had the essential characteristic of the finished goods. 1.27 At this juncture, reliance in this regard is placed to the HSN Explanatory Notes to section XVI. The relevant portion of the HSN Explanatory Notes is extracted below for ease of reference: "(IV) INCOMPLETE MACHINES (See Gen....
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....ware and compatible and in-built CPU with a preinstalled operating system in form of Android 13.0, 4GB RAM, and 32 GB internal storage. Upon simple assembly post the importation, these parts will have all the specifications of an IFP. Thus, these parts, in their proposed imported condition will have the essential character of a complete/finished IFP, though they may not be functional at the time of import. Therefore, it is submitted that parts of IFPs proposed to be imported in an unassembled form have the essential character of complete IFPs. 1.30 The Applicant further submits that the parts of IFPs proposed to be imported by the Applicant will not be classifiable as Parts and accessories suitable for use solely or principally with machines of headings 8471 under Tariff Item 8473 30 99. In this case, the Applicant is of the view that by application of GI Rule 2(a), the parts of IFPs proposed to be imported by the Applicant are deemed to be an unassembled IFP having the essential characteristic of an IFP. 1.31 Once it is established that imported parts will be classifiable as complete IFPs, it is imperative to understand the classification of complete IFPs. In this regard, th....
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....ratus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network); (iii) loudspeakers and microphones; (iv) television cameras, digital cameras and video camera recorders; (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." 1.34 The HSN Explanatory Notes to Tariff heading 8471 are also extracted below: "(I) 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 cas....
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....use of data media such as magnetic tapes, or by direct reading of original documents, etc. There may also be arrangements for manual input by means of keyboards or 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 comp....
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.... b. It is of a kind solely or principally used in an automatic data processing system; c. It is connectable to the central processing unit either directly or through one or more other units; and d. It is able to accept or deliver data in a form (codes or signals) which can be used by the system; and e. It is not excluded by the provisions of Notes 6 (D) and (E) to this Chapter. 1.36 In the present case, it is the Applicant's understanding that parts of IFPs proposed to be imported by the Applicant satisfy the conditions mentioned above. The same are analyzed below: Condition 1: Storing and processing programmers and data necessary for execution of program. 1.37 The parts of IFPs would be imported with an in-built CPU, 4 GB RAM, and Android 13.0 Operating System. In addition, they will also have an internal storage capacity of 32 GB. Since these goods will be capable of storing data or programs for the execution of programs, they will satisfy condition no. (i) of Chapter Note 6 (A) to Chapter 84. Condition 2: Being freely programmable as per the needs of the user. 1.38 The parts of IFPs will come with a pre-installed operating system, n....
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.... as per HSN Explanatory Notes, the parts of IFPs will have an inbuilt CPU along with storage, having in it amongst it, the operating system for working of the machine. Further, the inputs will be received by the monitor through a touch sensitive screen. The presence of slots will allow the system to also receive inputs through external devices such as mouse, etc. The machine would then process such information and produce the results based on user input action. In the instant case, the controlling system, input system and output system will all be encapsulated within the same device. 1.41 Thus, what the HSN Explanatory Notes as well as the Chapter Note 6(A) require for an article to be classified as an ADP machine is its ability to receive inputs, process the same and provide an output for the execution. The Tariff as well as HSN Notes do not indicate that the presence of a large screen is a factor to be considered in deciding the classification of an IFP as an ADP machine. The Applicant is of the view that by virtue of GI Rule 2(a), once it is concluded that parts of IFPs have the essential character of a complete/finished IFP, then it should be deemed to be complete IFP for cl....
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.... held that the same would be classified under Tariff heading 8471 as an automatic data processing machine since it satisfies the test for an ADP machine under the said heading prescribed under Note 5(A) to Chapter 84 by application of GRI 1. In the instant case, the Hon'ble Tribunal also held that the mere presence of a large screen could not imply that the subject goods are classifiable as monitors, if these goods are otherwise capable of performing a function of ADP machine under Tariff heading 8471. Similarly, in Cloudwalker Streaming Technologies Pvt. Ltd. v. CC, 2021-VIL-802-CESTAT-MUM-CU, the Hon'ble Tribunal held that in the subject goods, mere presence of a large screen cannot be the sole reason to consider an ADP machine as a monitor if it otherwise satisfies all conditions under Chapter Note 5(A) to Chapter 84. 1.45 The Ld. Authority for Advance Rulings has also in the past considered the classification of similar IFPs and has held that these are classifiable as ADP Machines under CTH 8471 and not as Monitors under CTH 8528. The decisions of the Ld. Authority for Advance Rulings are listed below: a. Audio Distribution House Pvt. Ltd., 2022-VIL-02-AAR-C....
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....s regard, necessary comments are as under :- Point raised Reply 3(i). Eligibility of the applicant, in terms of section 28-E (c) of the Customs act, 1962 to seek such advance ruling. As per Section 28E(c)(i), the applicant is eligible as he is holding a valid Importer- Exporter Code Number granted under Section 7 of the Foreign Trade Development and Regulations) Act, 1992. 3(ii) Applicability of proviso (1) of SECTION 28-I (2) of the Customs Act, 1962 regarding the question raised in the application. The applicability has been examined as per proviso (1) of SECTION 28-I(2) of the Customs Act, 1962 regarding the question raised in the application and same are attached in detailed reply below. 3 (iii) Specify whether the claim of the applicant regarding the nature of activity, i.e. it is ongoing/ proposed is correct; and As detailed in reply below. 3(iv). Comments on the merits of the question raised in the application along with all materials in support thereof. The comments are as Under: COMMENTS ON THE GROUNDS REQUIRING ADVANCE RULING IN THE CASE OF M/S. PLUMAGE SOLUTIONS PVT. LTD: ISSUES REQUIRING ADVANCE RULING: 2.1 Whether "Parts of IFP i.....
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....PROCESSING MACHINES AND UNITS THERE OF; MAGNETIC OR OPTICAL READERS, MACHINES FOR TRANSCRIBINGDATA ON TO DATA MEDIA IN CODED FORM AND MACHINES FOR PROCESSING SUCH DATA, NOT ELSEWHERE SPECIFIED OR INCLUDED 847130 - Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display: - Other automatic data processing machines: 847141 -- Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: 84714110 --- Micro computer 84714120 --- Large or main frame computer 84714190 --- Other 84714900 -- Presented in the form of systems 2.5 Note 6(A) to Chapter 84: 6. (A) For the purposes of heading 8471, the expression "automatic data processing machine" means machine capable of: (1) storing the processing programme or programmes and at least the data immediately necessary for the execution of the programme; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user, and (4) executing, without....
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....nly 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. In the subject case, there are two headings for consideration, one is heading 8471, which the importers contend, and another one is 8528, which the department contends. Though both appear equally specific, the subject item does not satisfy all the criteria mentioned in Note 6 for classification under heading 8471. Hence, it is important to test whether the criteria mentioned in heading 8528, which the department contending, is satisfied for the classification of the subject goods. 2.8 Heading 8528 covers: Tariff Items Description of goods 8528 Monitors and projectors, not incorporating television reception apparatus: reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus - Cathode-ray tube monitors: 85284200 -- Capable of directly connecting to and designed for use with an automatic data processing machine of heading 84.71 85284900 -- Others &nb....
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.... as products with efficient display qualities, touch screen, write or draw on screens etc. The subject items are neither traded in the market as "automatic data processing machine" nor as machine for use with an automatic data processing machine of heading 84.71. Rather these are traded as a display device only. The machine may perform some functions of an ADP Machine, but the same not being its principal function, it would not be treated as an ADP machine. It is pertinent to mention here that even Cellular Android Phones do incorporate all the functions of 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 principal function of the item "Flat Panel Display" is to interact through display. Judicial orders and litigations pending: 2.13 Vide Ruling Nos. CAAR/Mum/ARC/ 03/ 2023 dated 31.01.2023, CAAR/ Mum/ARC /15/ 2022 dated 03.06.2022 of CAAR, Mumbai in the case of applications filed by M/s. Compuage Infocom Ltd., Mumbai and Ruling No. CAAR/Del/Supertron/10/2023 dated 09.05.2023 of CAAR, New Delhi in the case of applications filed by M/s. Supertron Electronics Pvt. Lt....
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....ard - Housing assembly - Mother Board - Remote Control - USB Cable - HDMI Cable - Stylus Pen, - Panel Unit - Telesonic pointer 4.2 The application in respect of 35 models of IFPs having similar features. The only distinguishing feature in all these models is their screen size i.e., 65", 75", 86" and 98". Sample image of the subject goods is provided hereinbelow: The IFPs proposed to be manufactured by the Applicant will have the following specifications: a. A built-in Android 13.0 Operating System b. 4GB RAM c. Flash 32GB EMM d. Compatible with other operating systems like Windows 11/Linux/Chrome e. Optional OPS Slot with PC Option for computing - Intel Core i5 with 8 GB memory and 256/512 GB SATA SDD or 1TB SATA HDD f. 3840(H) x 2160 (V) IPS Screen (DLED Backlit) and an Aspect Ratio of 16:9 g. Connectivity of BT 5.2 and WIFI 6 h. Aspect Ratio of 16:9. i. 2 Stylus 4.3 According to the Applicant, the subject goods are classifiable under CTH 8471 and more specifically under CTI 8471 41 90. Accordingly, the Applicant has approached the Ld. Customs....
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....te 6(A) to Chapter 84. 3 Performing Arithmetic Computations specified by the user The subject goods have an inbuilt CPU. The CPU contains an arithmetic logic unit (ALU), a control unit and various other registers. The arithmetic/logic unit can perform four kinds of arithmetic operations, or mathematical calculations: addition, subtraction, multiplication, and division. As its name implies, the arithmetic/logic unit also performs logical operations. A logical operation is usually a comparison. The unit can compare numbers, letters, or special characters. The subject goods then take action based on the result of the comparison. Thus, the ALU performs arithmetical and logical computations depending on the inputs provided by the user. Therefore, it is evident that the subject goods perform general computing tasks which require arithmetical computations. Thus, the goods meet the requirements of condition (iii) of Chapter Note 6(A) to Chapter 84. 4. Executing, without human intervention, a processing programme which requires them to modify their execution, by logical decision during the processing run A user through various means of inputs can give a command to th....
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....under CTI 8471 41 90. A few decisions of the Ld. Authority amongst other have been mentioned hereinbelow: a. In re: Viewsonic Technologies India Private Limited CAAR/Mum/ARC/56/2024 dated 05.04.2024 b. In re: MZ Audio Distributions India CAAR/Mum/ARC/22/2024 dated 20.02.2024 c. In re: Supertron Electronics Pvt. Ltd. 2024 (3) TMI 505 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, NEW DELHI d. In re: Supertron Electronics Pvt. Ltd, 2023 (6) TMI 652 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, NEW DELHI e. In re: Lenovo India Pvt. Ltd., 2024 (1) TMI 1167-AUTHORITY FOR ADVANCE RULINGS CUSTOMS, MUMBA f. In re: Mitsubishi Electric India Pvt. Ltd. 2023 (4) TMI 16 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, NEW DELHI g. In re: Brightpoint India Pvt. Ltd. 2023 (6) TMI 657 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, MUMBAI h. In re: M/s. Brightpoint India Pvt. Ltd., 2023 (6) TMI 657 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, MUMBAI i. In re: Audio Distribution House Pvt. Ltd 2023 (2) TMI 1213 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, MUMBAI j. In re: Next Education India Pvt. Ltd. 2022 (1) TMI 849 - AUTHORITY FOR ADVANCE ....
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.... the Commissioner of Customs. Response to the comments: 4.10 The Applicant submits that it has nowhere been disputed in the comments that the subject goods are not ADP machines. In fact, it has been admitted that subject goods have in-built functions of the ADP machines. 4.11 The Department has contended that the principal/main use of product is display rather than ADP. Thus, in common parlance and trade, the subject goods are understood as 'Display systems'. Therefore, on application of Rule 3(a), the subject goods must be classified as under CTI 8528 59 00. 4.12 In this regard, the Applicant submits that the reliance on common parlance test is misplaced, and it is settled position of law that common parlance test would apply only when a statute does not provide any definition for the terms used in it. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in Commissioner of Customs & Excise vs. Connaught Plaza Restaurant, 2012 (286) E.L.T. 321 (S.C.). The decision of the Apex Court was based on a similar decision in Reliance Cellulose Products Ltd., Hyderabad vs. Commissioner of Customs & Excise, 1997 (93) E.L.T. 646 (S.C.), wherein....
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....1 90. In light of the above submissions, it is most humbly prayed that the Ld. Authority be pleased to allow the application and hold that subject goods are classifiable under CTI 8471 41 90. 4.17 Without prejudice to the above, assuming without accepting that that parts of IFPs do not have an essential character of complete IFPs, it is submitted that these parts will be alternatively classifiable under CTI 8473 30 99, as Parts and accessories suitable for use solely or principally with machines of headings 8471. Analysis and Conclusion 5. The Applicant is an Original Design Manufacturer (ODM) engaged in the manufacture of various Information & Communications Technology (ICT) products, supporting peripherals, accessories etc., for many Brands in India. As part of its portfolio of various ICT Products, the Applicant intends to manufacture & assemble Interactive Flat Panels (IFPs). It is to be noted that these parts will be imported in definite quantities and matching sets as part of one consignment. Post import, these will be assembled into complete IFPs in India. A brief process of assembly, testing and packaging is provided under para 1.2 of this Ruling. 5.1 Classifica....
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.... presented unassembled or disassembled) (V) The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport. (VI) This Rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of this Rule. (VII) For the purposes of this Rule, "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved. No account is to be taken in that regard of the complexity of the assembly method. However, the components shall not be subjected to any further working operation for completion into the finished state. Unassembled components of an article which are in excess of the number required for that arti....
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.... condition, by application of GI Rule 2(a). For assessment, the goods were to be treated to be complete machines classifiable under Tariff Item 8477 10 00 of the Customs Tariff. 5.1.7 In the case of Thomson Consumer Electronics India P. Ltd. v. CC Chennai, 2004 (164) E.L.T. 292 (Tri .- Chennai), the Hon'ble Tribunal relied on Sharp Business Machine Pvt. Ltd. v. Commissioner, 1990 (49) E.L.T. 640 (S.C.) and held that items imported in SKD condition are rightly classified the as audio system by application of GI Rule 2(a). The relevant extracts of the case are as follows: "6. On a careful consideration of the submissions, we notice that the items imported is in SKD condition and in terms of Note 2(a), the authorities have rightly classified the item as audio system and there is no error or infirmity on this aspect of the matter. The goods required an import licence and they are mere parts and components as all the items were in SKD condition in sets. The Commissioner has clearly gone through all the matter and has given a correct and legal finding. In terms of the Apex Court's judgment rendered in Sharp Business Machines Pvt. Ltd (supra) where the items are import....
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....INES (See General Interpretative Rule 2 (a)) For convenience of transport many machines and apparatus are transported in an unassembled state. Although in effect the goods are then a collection of parts, they are classified as being the machine in question and not in any separate heading for parts. The same applies to an incomplete machine having the features of the complete machine (see Part (IV) above), presented unassembled (See also in this connection the General Explanatory Notes to Chapter 84 and 85). However, unassembled components in excess of the number required for a complete machine or for an incomplete machine having the characteristics of a complete machine, are classified in their own appropriate heading." 5.1.11 In the present case, it is submitted that Applicant will import all parts for use in the assembly of complete IFPs and no part will be domestically procured. The proposed parts such as Power Cord, Mother Board, HDMI Cable, Panel Unit + Housing Assembly, Power Board, Remote Control, Stylus Pen, Telesonic Pointer, and USB Cable will be used in assembly of an IFP in India and in essence would pertain to a large interactive screen which would....
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....ecution 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. .... (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, including apparatus for communication in a wired or wireless network (such as a local or wide area network); (iii) loudspeakers and microphones; (iv) television cameras, digital cameras and video camera recorders; (v) monitors and projectors, not incorporating television reception apparatus. (E) Machines incorporating or working in....
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....thmetical computations specified by the user; and (4) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. 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. Automatic data processing 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 usually automatic, by the use of data media such as magnetic tapes, or by direct reading of original documents, etc. There may also be arrangements for manual input by means of keyboards or 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 m....
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....nally be connected before the input unit or after the output unit. Automatic data processing machines and systems are put to many uses, for example, in industry, in trade, in scientific research and in public or private administrations. (See Part (E) of the General Explanatory Note to Chapter 84 with respect to the classification of machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function (Note 6 (E) to this Chapter)).". 5.1.15 Thus, as per the HSN explanatory notes, an apparatus can be classified in this heading as a unit of an automatic data processing machine (hereinafter referred to as "ADP machine") only if: a. It performs a data processing function; b. It is of a kind solely or principally used in an automatic data processing system; c. It is connectable to the central processing unit either directly or through one or more other units; and d. It is able to accept or deliver data in a form (codes or signals) which can be used by the system; and e. It is not excluded by the provisions of Notes 6 (D) and (E) to this Chapter. 5.1.16 The following table ....
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....processing programme which requires them to modify their execution, by logical decision during the processing run A user through various means of inputs can give a command to the parts of IFP upon simple assembly and the same would be executed without any further intervention of the user. The CPU has an inbuilt control unit contains circuitry that uses electrical signals to direct the entire computer system to carry out, or execute, stored program instructions. The inbuilt CPU, along with the OS executes the command so given by the user by taking logical decisions during the processing run. Thus, condition (iv) is also satisfied. 5. Goods are not excluded by provisions of Note 6(D) and (E) to Chapter 84 Note 6(D) and (E) to Chapter 84 exclude the following goods: (i) printers, copying machines, facsimile machines, whether or not combined; (ii) apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network); (iii) loudspeakers and microphones; (iv) television cameras, digital cameras and video camera recorders; (v) mo....
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....mmittee while considering the classification of an "electronic interactive whiteboard (Smart Board)" having a display of 78 inches in its 60th Session (October - 2017), held that the same must be classified under Tariff heading 8471. In view of the above, by application of GI Rules 1 and 2(a), Tariff Item 8471 41 90 is the most suitable classification for the parts of IFPs. 5.1.19 Without prejudice to the above, assuming without accepting that that parts of IFPs do not have an essential character of complete IFPs, it is submitted that these parts will be alternatively classifiable under Tariff Item 8473 30 99, as Parts and accessories suitable for use solely or principally with machines of headings 8471. In any case, these parts may not be classifiable under Tariff Item 8528 59 00. 5.2 Further, the Authorities in Delhi as well as Mumbai have in the past considered the classification of similar products and held that the goods are classifiable under CTI 8471 41 90. A few of such decisions have been mentioned hereinbelow: a. In re: Viewsonic Technologies India Private Limited CAAR/Mum/ARC/56/2024 dated 05.04.2024 b. In re: MZ Audio Distributions India CAAR/Mum....
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....herein the classification of 'Interactive Electronic White Board' was held as CTI 8528 51 00. f. Reliance is also placed on the Minutes of the NAC meeting on Electrical Machineries held on 28.05.2024, wherein the issue of classification of the subject goods has been upheld under CTH 8528 and recommended "A Flat Panel display; not an ADPM. To be classified under CTH 8528". 5.4 The Applicant has rightly responded that it has nowhere been disputed in the comments that the subject goods are not ADP machines. In fact, it has been admitted that subject goods have in-built functions of the ADP machines. The Department has contended that the principal/main use of product is display rather than ADP. Thus, in common parlance and trade, the subject goods are understood as 'Display systems'. Therefore, on application of Rule 3(a), the subject goods must be classified as under CTI 8528 59 00. In this regard, the Applicant has rightly submitted that the reliance on common parlance test is misplaced, and it is settled position of law that common parlance test would apply only when a statute does not provide any definition for the terms used in it. Reliance in this rega....
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....er CTH 8471. Similar principles were laid down in Cloudwalker Streaming Technologies Pvt. Ltd. vs. Commissioner of Customs, 2022 (1) TMI 1078 - CESTAT Mumbai. 5.8 In reference to the Minutes of the NAC meeting on Electrical Machineries held on 28.05.2024 it has been mentioned that the said item under review needs to be classified under CTH 8528. But, the matter under consideration before the NAC cannot be applied mutatis- mutandis in the current case under consideration. Mere mentioning or referring to the Minutes does not necessitates the classification to be given under CTH 8528. Coming to the conclusion and decision of the Commissioner of Customs in the Order in Original No. 108256/2024 dated 18.07.2024, the facts of the matter and ratio of the case cannot be applied in the current classification. 5.9 In conclusion, as demonstrated in the table above, the subject goods satisfy the stipulations as specified under Note 6 to Chapter 84. Therefore, the subject goods are classifiable under CTI 8471 41 90. In light of the above submissions, the subject goods are most appropriately classifiable under CTI 8471 41 90. Issues requiring Advance Ruling 6. The applicant is seekin....