CUSTOMS AUTHORITY FOR ADVANCE RULINGS

NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAD 400 001

E-MAIL: cus-advrulinqs.mum@gov.in

Application No. CAAR/CUS/APPL/80/2023 - O/o Commr-CAAR-MUMBAI

Ruling

M/s. Audio Distribution House Pvt. Ltd. (hereinafter referred to as 'the applicant') filed an application for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR, in short). The said application was received in the secretariat of the CAAR, Mumbai on 06.06.2023, along with its enclosures in terms of Section 28H (I) of the Customs Act, 1962 (hereinafter referred to as the 'Act'). The applicant is seeking advance ruling on the classification of 'Creative Touch 5-series Interactive Flat Panel (IFP) (Models - 5652RK+, 5752RK+,5862RK+), proposed to be imported.

2. The applicant is a registered private limited company involved in the business of import of computer peripherals and other electronic equipments. The applicant is also registered under the Goods Services Tax Act, 2017, bearing registration No.27AAOCA7734LlZ2. The applicant is intending to import "Creative Touch 5-series Interactive Flat Panel (IFP) (Model  5652RK+, 5752RK+, 5862RK)" (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, (Quad Core A73) Micro Processor (CPU), Mali G52 Graphics Card, 8GB RAM, and 64 GB SSD Storage. It also has an Embedded Android system pre-loaded with Android 11.0 Android Operating System (OS). The applicant is of the view that the subject goods are classifiable under CTH 8471 4190.

2.1 The applicant is of the bonafide belief that the subject goods are rightly classifiable under 8471 4190. Therefore, the present application is being filed to ascertain the correct classification for the subject goods, under CTH 84714190.

2.2 The classification of "Creative Touch 5-series Interactive Flat Panel (1FP) (Model -5652RK+, 5752RK+, 5862RK+)" falls under chapter 8471. Chapter 8471 contains the following entries:

2.3 The applicant states that the subject goods is an All-in-one (AIO) Computer System, which functions like a large size tablet computer, and has an integrated system with Central Processing Unit, Mother Board, Graphic Card, Memory (RAM+Storage), Touch Screen as Virtual Key Board as an input device and Video Display Unit as an output device. The subject goods are not mere display units, rather they are computer systems with extensive connectivity, which offers versatile plug and play compatibility with Windows, Mac and Chrome OS. Facilities like built-in Marketplace, Cloud Drive, and file manager provide easy access to popular apps and cloud storage. The Screen recording capabilities of this IFP enable easy saving of meetings, lessons or motes for later viewing or sharing.

2.4 It is submitted that the Panel has an "Embedded Android system" preloaded with Android 11.0 Android Operating System (OS), which delivers incredible software functionality, including a 4K UHD user interface. Apart from Android OS, this panel is capable of functioning on Microsoft Windows 10 OS, if an optional OPS SLOT-IN PC MODULE is added in the system. In addition, the Panel provides enhanced protection via programmable PIN code and USB port disable, thereby ensuring that the Optoma 5-series IFP is safe and secure for any environment.

2.5 As per Webopedia, the term definition of an "All-in-one 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 place, inside the monitors 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 11.0, and Desktop Operating Systems Microsoft Windows, like Apple Mac and Chrome OS. In other words, Optoma Creative Touch 5-Series Interactive Flat Panel (IFP) is an All In One (AIO) Computer System, and functions like a large size tablet computer.

2.6 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 data-processing machines" means machines, capable of

(1) storing the processing program or programs and at least the data immediately necessary for the execution of the program;

(2) being freely programmed in accordance with the requirements of the user,

(3) performing arithmetical 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. "

2.7 It is submitted that subject goods "Optoma Creative Touch 5-Series Interactive Flat Panel", has the necessary Hardware Memory (RAM+ Storage- SSD), in which the Operating System as well other Software programs are stored to execute the data processing process, and thereby satisfies the condition 5 (A) (1) of the Chapter notes. The software loaded in the IFP being freely programmed in accordance with the requirements of the user, fulfilling the condition given in 5(A)(2) of the chapter notes. Creative Touch 5-Series Interactive Flat Panel, perform the arithmetical computations specified by the user which satisfy the condition 5(A)(3) of the chapter notes. It is submitted that Optoma Creative Touch 5-Series Interactive Flat Panel has a processing program, which makes it capable of modifying their execution by logical decision during the processing run, so satisfies the condition 5(A)(4) of the chapter notes. In other words, the subject goods fulfill all the conditions of chapter notes. In other words, the subject goods fulfill all the conditions of 5(A) of the chapter notes, and thereby qualifies to be covered by the definition of Automatic Data Processing (ADP) Machine.

2.8 It is, further, submitted that 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 States. The corresponding tariff heading in the Schedule-I of the Customs Tariff heading would be as follows:

It is submitted that 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".

2.9 The applicant states that in respect of an identical item, this Hon'ble Authority, vide Ruling Nos. CAAR/Mum/ARC/04/2022 dated 02.02.2022, CAAR/Mum/ARC/ 15/2022 dated 03.06.2022 and CAAR/Mum/ARC/03/2023 dated 31.01.2023 has held that the product, 'Creative Touch Interactive Flat Panel (IFP) merits classification under sub heading 8471 4190 of the First Schedule to the Customs Tariff Act.

3. The applicant intends to import the said goods through The Commissioner of Customs, Nhava Sheva-V, JNCH, Tai Uran, Accordingly, comments from the jurisdictional Commissioner of Customs, Nhava Sheva-V were invited vide this office letter dated 08.06.2023. Later reminder letters dated 15.09.2023, 30.11.2023, 11.12.2023 were also forwarded however, no response has been received from the jurisdictional Commissioner.

4. The application was listed for hearing on 09.01.2024. The applicant was represented by Shri. Sethu Prabhakaran R. He reiterated CAAR-I application by taking recourse to Grounds of the application, relevant extracts of the tariff, previous rulings and technical write-up. He finally requested to issue ruling in the present case based on the facts on record. No one represented the jurisdictional Commissioner of Customs in the hearing.

5. I have considered all the materials placed before me in respect of the subject goods for which an advance ruling has been sought. 1 have gone through the written submissions as well as the points made during personal hearing. In absence of comments on this subject from the jurisdictional authority on the subject goods, I proceed to pronounce ruling on the issue on the basis of information available on record and product details available on the website https://www.optoma.co.uk/products/intcractive-flat-panel-displays/ The goods are creative Touch 5 series interactive flat panels. Different model numbers viz. 5652RK+, 5752RK+,5862RK+ are as per the screen sizes, namely 65 inches, 75 inches and 86 inches, respectively. The subject goods for which advance ruling has been sought, its characteristics, functionality and utility etc. are broadly discussed in the aforementioned paras. The issue involved is whether the impugned goods, namely, 'Optoma Creative Touch 5-series Interactive Flat Panel (IFP)' can be considered as ADP machines.

5.1 The impugned goods are basically described as an ADP machine, consisting integrated system with Central Processing Unit, Mother Board, Graphic Card, Memory (RAM+Storage), Touch Screen as Virtual Key Board as an input device and Video Display Unit as an output device, all in one place, inside the display's body. The subject goods typically come loaded like a Tablet computer system, with a mobile operating system and touch screen display processing circuitry, and has two classes of Operating Systems, i.e., mobile operating system and touch screen display processing circuitry, and has two classes of Operating Systems, i.e., Mobile Operating System like Android 11.0, and Desktop Operating Systems Microsoft Windows, like Apple Mac and Chrome. It has been suggested by the applicant that the subject goods merit classification under sub heading 84714190, as they satisfy all the requirements as mandated under Note 5(A) (henceforth referred as 6 (A)) to Chapter 84 of Customs Tariff Act, 1975.

5.2 Rule 1 of the General Rules of Interpretation (GRI) lays down that the titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes.,-

Chapter 8471 of Customs Tariff Act, 1975 covers, "Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included'

Chapter Note 6(A) states that:

"For the purposes of heading 8471, the expression "automatic data-processing machines" means machines, capable of

(1) storing the processing program or programs and at least the data immediately necessary for the execution of the program;

(2) being freely programmed in accordance with the requirements of the user,

(3) performing arithmetical 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. "

In order to merit classification under heading 8471, it is clear that subject goods need to satisfy the requirements of note 6(A) to chapter 84. Therefore, there is a need to examine whether the features and specifications of the subject goods under consideration meet the criteria as laid down in the relevant chapter note reiterated above.

5.3 From the open source available, it is understood that Automatic data processing (ADP) machines have storage capability and also stored programs which can be changed as per the performance of tasks. Digital 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 either automatic through the use of data media such as magnetic tapes or manual by means of keyboards, touchscreen etc. The input data are converted by the input units into signals which can be used by the machine and stored in the storage units. The data is then operated by the CPU and operating system to produce output. From para 2 and 2.1, it is evident that these machines have a main storage capability which is directly accessible for the execution of a particular program and which has a capacity sufficient to store those parts of the processing & translating programs and the data immediately necessary for the current processing run. Therefore, the goods satisfy the condition specified in Note 6(A) 1. As per Note 6(A) 2, the machine should be able to be freely programmed in accordance with the requirement of the user. From the product details submitted, it appears that these goods come configurable with off-the-shelf, end-user applications allowing the programming of the various functions in accordance with the needs of the user. As per the product details available on the website, these devices have pre-installed apps including Office Suite, which allows users to open and edit all Microsoft Office documents. Applications available include GoToMeeting, Firefox, Evernote, and many more. Therefore, the goods satisfy condition as per 6(A)2. Creative Touch 5-Series Interactive Flat Panels, perform the arithmetical computations specified by the user which satisfy condition 6(A)(3) of the chapter notes. It is submitted that Optoma Creative Touch 5-Series Interactive Flat Panels have a processing program, which make them capable of modifying its execution by logical decision during the processing run, so satisfy condition 6(A)(4) of the chapter notes. From forgoing discussions, it is clear that the subject goods satisfy all the requirements as mandated under Note 6(A) (previously referred to as 5 (A)) to Chapter 84 of the Customs Tariff Act, 1975. Accordingly, the subject goods are classifiable under CTH 8471 as ADP.

5.4 Note 6(B) to chapter 84 states Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. Note 6(C) to chapter 84 specifies the conditions for a unit to be classified as being part of an automatic data processing system. 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. In a standalone configuration, the devices under consideration process applications compatible with the various Android operating system (OS), join wired or wireless networks, access and manipulate folders and files, and perform general computing tasks such as Internet browsing, email, and editing office documents. Therefore, from the working and features of the impugned goods, it appears that these are neither units of ADP machines nor ADP machines presented in the form of systems but ADP machines themselves.

6. ADP machines are categorized in CTH 8471 as per one dash subheading as follows:-

1st one-dash subheading: Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display

2nd one-dash subheading: Other automatic data processing machines.

As the machines under consideration do not have a keyboard, they appear to be classifiable as other ADP machines under 2nd one-dash subheading. Subheading 847141 covers other ADP machines; comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined. For the machines under consideration, the LED screen satisfies the requirement for output and the touchscreen satisfies the requirement for input apart from the CPU inbuilt into the device. Therefore, the subject goods appear to be classifiable under subheading 847141 and more specifically under subheading 84714190 as "'Other automatic data processing machines: Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: Other".

7. In view of these facts, I rule that Creative Touch 5-series Interactive Flat Panel (IFP) (Models - 5652RK+, 5752RK+,5862RK+) merit classification under Heading 8471 and more specifically under CTI 8471 41 90 of the first schedule to the Customs Tariff Act, 1975.

(P K Rameshwaram)

Customs Authority for Advance Rulings, Mumbai