TMI Blog2022 (8) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... uded 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 capturing of data and its further processing, the Notes 6(D) and 6(E) do not appear to have application in this case. In the instant case, these devices combine computing and scanning functions for monitoring deliveries, tracking assets, and managing inventory. They also have communication capabilities. However, for the products under consideration, automatic data processing appears to be the main function, while other functionalities of said machines are not different from auxiliary functions that could be seen on any computer, such as desktop or laptop computers. The difference between a 'smartphone and tablet computer , is not based on whether the product has a voice calling functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 Without SIM 39 2 MC33 Without SIM 39 3 MC 93 Without SIM 39 4 PS 20 Without SIM 39 5 MC27 With SIM 40 6 Touch Computers TC21 Without SIM 39 7 TC 52 Without SIM 39 8 TC 72 Without SIM 39 9 TC 83 Without SIM 39 10 TC 26 With SIM 40 11 TC 57 With SIM 40 12 TC 77 With SIM 40 13 TC 15 With SIM 40 Both the applications cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sunlight; (g) Extended battery life; (h) Barcode scanner for reading 1D and 2D barcodes, apart from reading QR codes. The barcode scanner is equipped with an enterprise-class scan engine. The advantage is the reduction in scanning time. This device can decode 60 barcodes per second, enabling scans of over 5000-10000 barcodes per hour in continuous mode; (i) The laser can read short, mid and long-range scanning capability; (j) No separate audio jack; for voice communication, it is generally advised to have earphones; (k) It is primarily designed for scanning applications and processing scanned data and not for voice communication; (l) Specialized applications are developed to run on mobile computers, which are not/cannot run on android based mobile phones; (m) The physical keyboard is akin to what is found on a conventional computer; (n) Extra keys are provided for scanning and for performing other data processing functions. 2.1 The applicant has submitted that the handheld mobile computers proposed to be imported by them are classifiable under Heading 84.71 as Automatic Data Processing (ADP) machines, for the following r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the processing run. The Handheld mobile computers while performing tasks like scanning, asset/inventory management/invoicing are essentially functioning without manual intervention on the basis of a pre-programmed logical sequence of operations. As per the applicant, Chapter Notes 6(C), 6(D) and 6(E) are not applicable to the impugned devices as the products are in themselves ADP machines. Thus, the proposed imports satisfy all the conditions to be fulfilled by ADP machines. 2.3 The applicant further stated that without prejudice, even if it is assumed that these devices are capable of performing more than one function, i.e., capable of functioning other than as an ADP machine, the function of the ADP machine is the principal function and therefore, shall be treated as an ADP machine in terms of Note 3 to Section XVI. The proposed imports are marketed to businesses for ease of logistics and not as a substitute for a communication device. That, the handheld mobile computers are used to transmit other data, apart from the inventory-related data, is only an incidental function and the classification is to be based as if the principal function were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hones under sub-heading 8517 13 00 as the proposed imports are essentially ADP machines which have an additional feature of cellular connectivity. It is also to be noted that 8 models of handheld mobile computers of application No. 39 (Para. 1) do not have the cellular calling function and thus do not have the capability to accommodate a cellular network system. In the SIM card- enabled models, the SIM facility is provided to have a data network when WiFi is not working. Such connection or facility is only an additional/supplemental feature. Therefore, as per the applicant, they cannot be classified under sub-heading 8517 13 00. 2.5 In respect of sub-headings 8517 62 90 and 8517 69 90. the applicant states that these are residuary entries and will only apply if products are not classified elsewhere. As explained above in detail, the imported handheld mobile computers are classifiable under Heading 8471, and if not under 8471, then alternatively under sub-heading 8517 13 or 8517 14. Thus, these products cannot be classified under the residuary Entry of 8517 62 90 or 8517 69 90. 2.6 In support of their contention, the applicant submitted Circular No. 20/2013, dated 14-5-2013 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect classification of mobile computers under the tariff of India? 3. The applicant in their CAAR-1 form declared that they intend to import the impugned devices, under the jurisdiction of Principal Commissioner/Commissioner of Customs, Nhava Sheva-I. ACC, Mumbai; Chennai Customs-III and IGI airport. Their applications, therefore, were forwarded to the Jurisdictional Commissioners of Customs for comments. However, no reply has been received, though reminders have also been sent. 4. Personal hearing was held on 29-6-2022 at 1230 hrs. Shri T. Vishwanathan and others represented the applicant. No one appeared on behalf of the Commissioners of Customs. Sh. Viswanathan explained that the difference between the two applications is that one application contains a mobile computer/touch computer with SIM card slots and the other one contains similar products without SIM card slots. Sh. Vishwanathan requested an amendment in application No. 40 to include another product, namely, TCI5 (with SIM) which is otherwise similar to the product listed in the application. Samples of all products (except PS 20) were produced for inspection and their working was explained. The working of Zebra P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 8471, the expression automatic data processing machines, 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. Therefore, there is a need to examine whether the features and specifications of the devices under consideration meet the criteria as laid down in the relevant chapter note reproduced above. The impugned devices, as seen in Para 2.2, appear to be able to satisfy the requirements of an ADP machine. 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 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computers. In Circular No. 20/2013-Cus., dated 14-5-2013, clarification has been given by the Board regarding the classification of tablet computers under Heading 8471 stating that, ... The mobile phone calling function could be provided by the products only as a supplementary function because it could not be activated without running an operating system of the devices.... These devices are not intended to be a substitute for a mobile phone to make voice calls, but, according to its main technical features is designed as a substitute for laptops. 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 . Thus, as per the said circular, tablet computers are classifiable under Heading 8471 and not under Heading 8517 despite the fact that the product is having cellular connection functionality, considering its principal function as automatic data processing. Similarly, in this case, the principal function of the impugned devices is barcode scanning and data processing for monitoring deliveries, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters every day to turbocharge their business . Therefore, these devices are essentially ADP machines with additional connectivity capabilities, including cellular connectivity in 5 devices of application No. 40, as discussed in Para 5.1 and the devices under consideration is already explained in Para 2.4. The impugned devices have many features such as higher scanning capacity, data editing functionality, ruggedness and enterprise-level security features, which a smartphone for cellular connection lacks. 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. On one of the devices, the TC77 series touch computer, which is a handheld mobile computer used for asset inventory management purposes, Singapore Customs ruled (ref. No. CRL-211217-0036) that the product is classifiable under sub-heading 8471 30 90. Therefore, notwithstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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