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2022 (10) TMI 1179 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAIClassification of goods - handheld enterprise mobile computers - to be classified under Heading 84.71 or under the Heading 85.17 of the Customs Tariff? - HELD THAT:- These are portable devices used in enterprise environments to run mobile apps, capture barcodes, take photos and videos, and provide voice and data communications for workers and managers. These devices combine personal computer and scanning functions (applies to mobile computers and tablet computers) in a single device that can be outfitted with off-the-shelf or custom software applications that perform everyday tasks, such as monitoring deliveries, tracking assets, and managing inventory. And because they run on familiar operating systems such as Windows/Android, they offer the same functionality as a desktop computer or laptop. These processors are also equipped with a barcode scan engine and act as their own host, which means one can instantly update and edit information as it is captured. Note 6(C) to Chapter 84 specifies the conditions for a unit to be classified as being part of an automatic data processing system. However, from the working and features of the impugned devices, it appears that these are not units of ADP machines, but ADP machines themselves. Note 6(D) to Chapter 84 lists certain separately presented products that are to be excluded from Heading 8471, even if they can be classified as part of an ADP system. Note 6(E) to Chapter 84 mentions that a machine 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. As the impugned devices, as described by the applicant appear to be akin to ADP machines performing the tasks of data capture and its further processing, the Notes 6(D) and 6(E) do not appear to have application in this case. As per Circular No. 20/2013-Cus., dated 14-5-2013, ‘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’. The manufacturer is advertising these products as mobile computers. These devices are essentially ADP machines with additional connectivity capabilities, including cellular connectivity in 8 devices - These devices are used by enterprises to capture data. The products are used in inventory management, store receiving, order processing, package tracking, tracing delivering etc. These devices use Wi-Fi connectivity and Bluetooth for information sharing. Cellular connectivity is essentially used for GPS and information sharing, where Wi-Fi is not available. Cellular connectivity can also be used for making calls. Therefore, the devices under consideration are not classifiable as smartphones. The 13 devices listed in the Table-1 in the first paragraph of this ruling are classifiable under Heading 8471 and more specifically, under sub-heading 8471 30 90 of the First Schedule to the Customs Tariff Act, 1975.
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