TMI Blog2022 (10) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... pter 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SIM 12 DT50Q With SIM 13 DT50-5G With SIM 2. The Applicant is engaged in the business of trading, designing, manufacturing, marketing and sale of Automated Identification and Data Capture (AIDC) products such as barcode scanners, barcode printers, mobile computers, POS printers and other information technology products utilised for primarily business and enterprise computing and IT solutions. The applicant intends to import the above-mentioned handheld mobile computers. These devices have Hard Keys (Volume up/down key, left/right scan, power, reset), Soft Keys (Three touch keys: Back, Home, Menu), are powered by Qualcomm or Mediatek Octa-core processor and possess the Android (7/8/9/10/11 or 12) operating system. They are equipped with front and rear cameras, battery and gorilla glass. They support GPS, Bluetooth and wi-fi system. They have multi touch capacitive screen, motion sensor equipped and have micro-SD card extension capability. As per the applicant, these devices are computers used for scanning barcode and processing data in order to increase efficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocessing machines and units thereof. The Heading also includes portable ADP machines that do not require an external electrical output for functioning. The relevant entries of Heading 84.71 of are extracted in the table below : TABLE-2 8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data on to data media in coded form and machines for processing such data, not elsewhere specified or included 8471 30 - Portable automatic data processing machines, weighting not more than 10 kg., consisting of at least a central processing unit, a keyboard and a display : 8471 3010 --- --- Personal computer 8471 3090 --- --- Other - Other automatic data processing machines To qualify as an ADP Machine, the goods have to satisfy all the conditions mentioned in Note 5(A) to Chapter 84 and should not be covered by Notes 5(D) and 5(E). Note 5A is extracted below : 5(A) For the purposes of heading 84.71, the expression aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... un. The Handheld mobile computers while performing tasks like scanning, asset/inventory management/invoicing essentially function without manual intervention on the basis of a pre-programmed logical sequence of operations. Applicant has stated that the proposed imports satisfy all the conditions to be fulfilled by an ADP Machine. Thus, the proposed imports are ADP Machines. 2.3 The applicant contends that the HSN Explanatory notes for Heading 84.71 state that a complete automatic data processing unit must comprise of at least the following three units, namely, Central processing Unit, Input Unit and an Output Unit. The Handheld Enterprise mobile computers proposed to be imported contain all three of the above units, i.e., input units in the form of a scanner, a central processing unit (inbuilt) in the form of processor and an output unit (the screen). Therefore, all the requirements to be an ADP machine is satisfied in the instant case. Thus, in terms of Rule 1 of the GIR, the mobile computer models in question are correctly classifiable under Heading 84.71 only. More specifically the products ought to be classified under Customs Tariff Item 8471 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Therefore, even this Chapter Note is not applicable to the Handheld mobile computers in question. 2.6 Applicant further submitted that Chapter Note 5(E) states that : (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. It is contended that aforesaid Note also will not apply in case of the handheld mobile computers proposed to be imported as they are ADP Machines themselves and not machines incorporating or working in conjunction with an ADP Machine. Therefore, in view of the above, it is submitted that the handheld mobile computers proposed to be imported are classifiable under Heading 84.71 and more specifically, classifiable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -- Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus : **** 8517 62 90 --- Other 8517 69 -- Other : **** 8517 69 90 ---- Other **** Definition of smartphone as Note 5 to Chapter 85 is as below : For the purposes of heading 85.17, the term smartphones means telephones for cellular networks, equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems . HSN Explanatory notes for Heading 8517 on Page No. XVI-8517-1 states that : This heading covers appa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multiple different barcodes of different formats to ensure correct data capture of interest. Security Has conventional security features which are not too good Has exceptional enterprise-level security features. Enterprise level support No Yes Device life Shorter (1-3 years) Longer (5 to 6 years) Operating Temperature range Low. Operates in 0 to +35 deg. C Higher. Can operate in even -20 to +50 degrees C Battery Fixed Removeable and Serviceable Scanning Range Barcode Scanning - distance is limited Barcode Scanning - near, mid-range and far depending on enterprise application need Security Updates Up to 3 years Up to 5 or 6 years Therefore, the Handheld mobile computers proposed to be imported are not classifiable under CTH 8517. 2.9 The products in question are not classifiable as smartphones . I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7130, by application of General Rules for Interpretation (GRI) of Import Tariff, Note 3 to Section XVI and Note 5(A) to Chapter 84 and 6 . The Circular also reaffirms the ruling of the World Customs Organisation, regarding tablet computers. As per the applicant, handheld mobile computers are similar to tablet computers based on the following characteristics : (a) Both devices are marketed with a focus on their data processing function; (b) Both devices are available for sale with SIM slots or without SIM slots. (c) Neither of the products is marketed as a replacement for conventional devices like cellular phones or mobile phones. (d) Both devices are portable alternatives to laptops and computers. 2.11 In relation to the afore-mentioned devices, the questions on which advance rulings have been sought are as follows :- (1) Whether handheld mobile computers to be imported by the applicant are classifiable under the sub-heading 8471 30 90? (2) If the answer to the above question is negative, then what would be the correct classification of mobile computers under the tariff of India? The applicant in their CAAR-I form declared that they in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. The issue before me to decide is the correct classification of handheld mobile computers. 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. The applicant has suggested heading 8471 as an appropriate classification for these devices. Due to insertion of following - For the purposes of Heading 84.62, a slitting line for flat products is a processing line composed of an uncoiler, a coil flattener, a slitter and a recoiler. A cut-to-leng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5.2 In respect of possible alternate Heading 8517, there is a need to examine the features of these devices in the context of Note 3 to Section XVI of the Tariff. Heading 8517 covers telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other 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), other than transmission or reception apparatus of Heading 84.43, 85.25, 85.27 or 85.28. As the devices also have communication capabilities, including cellular connectivity in devices 6-13 of the Table-1. classification under Heading 8517 needs to be examined. Note 3 to Section XVI of the tariff stipulates that, Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning and cellular connectivity under sub-heading 8517 13. This sub-heading covers smartphones. Note 5 to Chapter 85 states that For the purposes of Heading 85.17, the term smartphones means telephones for cellular networks, equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems . The note clearly states that these devices are telephones for cellular networks designed to perform the functions of ADP machines. However, the devices under consideration are principally not telephones for cellular networks. In fact, the devices at Sl. Nos. 1-5 in Table-1 do not have the functionality of cellular connectivity, which shows that the SIM is not an integral part of these devices, as these devices are able to perform their primary function with or without the SIM card. These devices appear to have, wherever SIM is provided, telephony as an added function. As per Circular No. 20/2013-Cus., dated 14-5-2013, the difference between a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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