In re Tecex India Private Limited (CAAR Mumbai)
The Customs Authority for Advance Rulings (CAAR), Mumbai, considered an application filed by Tecex India Private Limited for classification of a proposed import described as an “Integrated Rack Server” under Customs Tariff Item 8471 50 00. The applicant stated that the equipment would combine processors, memory, storage, networking components, power supplies, cooling equipment and management systems in a rack-mounted configuration for enterprise and data-centre use. According to the applicant, its primary function was to process and store data, with networking equipment supporting communication.
The application was received on 12.01.2026. The Authority forwarded it to the jurisdictional Customs Commissionerate in Chennai on 24.07.2026, but recorded that no reply had been received. At the personal hearing on 29.09.2026, the applicant’s authorised representative reiterated the claim for classification under Heading 8471, specifically CTI 8471 50 00.
The Authority examined the Customs Act, 1962, the Customs Tariff Act, 1975, the General Rules for Interpretation and Chapter Note 6 to Chapter 84. It explained that classification depends on the goods’ objective technical characteristics and functions, not simply their trade description. Note 6(A)addresses the characteristics of automatic data processing machines, including programme and data storage, free programmability, arithmetic computation and logical execution without human intervention. Notes 6(B) and 6(C) concern systems and constituent units, while Note 6(E) addresses machines performing a specific function other than data processing.
The Authority found that the application lacked complete technical literature, model-wise specifications, precise rack configuration, hardware component details, interconnections, software particulars and evidence of the principal function of the complete system. It was therefore not possible to determine whether the proposed import met the statutory requirements for classification as an automatic data processing machine or processing unit. The Authority also considered it necessary to know whether individual equipment could operate independently or perform functions other than data processing.
The Authority held that the generic designation “Integrated Rack Server” was insufficient to resolve the classification question. It treated the application as deficient in the technical particulars necessary for a meaningful determination, held it not maintainable under Section 28-I(2) of the Customs Act, 1962, and disallowed and disposed of it. No final tariff classification of the proposed goods was determined.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s TECEX INDIA PRIVATE LIMITED (I EC: AAJCT5256F) (hereinafter referred to as ‘the Applicant’) having registered address 3rd Floor, No.86, Polyhose Tower, SPIC Annexure Building, Guindy, Chennai, Tamil Nadu —600 032, filed an application (CAAR-1) for advance ruling in the Office of Secretary, Customs Authority for Advance Ruling (CAAR) Mumbai. ‘Hie said application was received in the secretariat o f the CAAR, Mumbai on 12.01.2026 along with its enclosures in terms of Section 2811(1) of the Customs Act. 1962 (hereinafter referred to as ‘the Act. also). The Applicant is seeking advance ruling on the issue of classification of the goods namely, “Integrated Rack Server” under the First Schedule of the Customs Tariff Act, 1975
2. The Applicant has sought ruling in respect of following question(s):
3. The appropriate classification of the goods to be imported, namely, “Integrated Rack Server” under the First Schedule of the Customs Tariff Act,1975.
3. Submission by the Applicant:
The applicant, M/s TECEX INDIA PRIVATE LIMITED having registered address 3rd Floor, No.86, Polyhose Tower, SPIC Annexure Building, Guindy, Chennai, Tamil Nadu — 600 032, is a private company incorporated in the year of 2022.
The applicant is a leading provider of IT hardware and technology equipment for the l’1′ industry worldwide. Professionals learn of TccF,x is committed to providing seamless and secure transportation of 11′ hardware and technology equipment worldwide.
The applicant is willing to import integrated rack server in India. Therefore, to clarify the classification of the said imports and to avoid any future litigation applicant sought this ruling on classification of integrated rack server.
It is also submitted that an integrated rack server is a type of server hardware designed to be mounted in a server rack and often pre-integrated with components or systems that allow it to function as part of a larger, managed IT environment. The detailed write up on integrated rack server is under;
I. DETAILED WRITE UP ON “INTEGRATED RACK SERVER”
An integrated rack server is a rack-mountable server that includes not just the basic compute unit (CPU, RAM, storage) but also built-in integration with other systems such as:
- Power distribution
- Networking
- Management tools
- Cooling systems
- Software integrations (like monitoring or orchestration platforms)
It is typically a turnkey solution, meaning it’s ready to deploy with minimal additional setup. An integrated rack server is a type of server hardware designed to be mounted in a server rack and often pre-integrated with components or systems that allow it to function as part of a larger, managed IT environment.
II. Feature of “integrated rack server” integrated rack server main feature is;
– advanced optical connectivity,
– high-speed seamless data transfer,
– robust multi-core performance,
– supported by memory and storage for intensive data processing,
III. Main function of “integrated rack server”
The integrated rack server is to process and store data, with support from networking equipment to communicate. ‘l’he custom integrated rack servers combine high-performance components in a compact enclosure, designed for enterprise and data centre environments.
IV. List of the component types that could be in the integrated rack servers:
The integrated rack servers will include items such as power supplies, efficient cooling solutions, and high-quality network and power cables, all housed in a rack enclosure with optimized airflow. Modular and expandable, it is ideal for Al, cloud computing, and virtualized workloads.
It may have following components
Transceivers, Networking Cables, Network Modules, Servers, Processors, Memory, Storage, Enclosures, Power Supplies, Cooling Solutions, Mounting Fixtures, Temperature Regulation, Cable Management. Expansion Modules, Networking Equipment such as routers, switches etc.
V. The custom integrated rack servers combine high-performance components in a compact enclosure, designed for enterprise and data centre environments. It features advanced optical connectivity, and high-speed seamless data transfer. It offers robust multi-core performance, supported by memory and storage for intensive data processing. The servers will include items such as power supplies, efficient cooling solutions, and high-quality network and power cables, all housed in a rack enclosure with optimized airflow. Modular and expandable, it is ideal for Al, cloud computing, and virtualized work loads. The integrated rack’s main function is to process and store data, with support from networking equipment to communicate.
3.1 Statement containing the applicant’s interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicants view point and submissions on issues on ‘s‘ hich the advance ruling is sought).
It is submitted that applicant purposed to import integrated rack server in India from outside India. The integrated rack server is a systems consisting of a variable number of separate units such as Transceivers, Networking Cables, Network Modules, Servers, Processors, Memory, Storage, Enclosures, Power Supplies, Cooling Solutions, Mounting Fixtures, Temperature Regulation, Cable Management, Expansion Modules, Networking Equipment such as routers, switches etc hence merit classification is Customs Tariff 84715000.
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
8471.50 00 – Processing units other than those of sub-headings 847141 or 847149, whether or not containing in the same housing one or two of the folloWing types of unit: storage units, input units, output units
Integrated rack server is to process and store data, with support from networking equipment to communicate. The custom integrated rack servers combine high-performance components in a compact enclosure, designed for enterprise and data centre environments. It is used to process and store hence merit classification is 8471 50 00.
4. Port of Import and reply from Jurisdictional Commissionerate
4.1 In terms of Section 28-1(1) of the Customs Act, 1962 read with Regulation 8(7) of the Customs Authority for Advance Rulings Regulations, 2021 a copy of the said application was forwarded by the Office of CAAR, Mumbai to the concerned jurisdictional Customs Commissionerate i.e. The Commissioner of Customs, Chennai — 11 (Import), Customs House, 60. Rajaji Salai. Chennai. Tamil Nadu — 600 001 on 24.07.2026, seeking the relevant records and comments, if any. However, no response has been received from the Jurisdictional Commissionerate till date.
5. RECORDS OF PERSONAL HEARING
5.1 A personal hearing was granted to the Applicant on 29.09.2026. During the course of the personal hearing, the authorised representative appearing on behalf of the Applicant reiterated the submissions made in the application and contended that the goods, namely, “Integrated Rack Server”, are appropriately classifiable under CTH 847150 O utke, ar-SL Schedule to the Customs Tariff Act, 1975.
5.2 No representative appeared for PI I from the department side.
6. DISCUSSIONS AND F INDINGS
6.1 I have carefully considered the application filed by the Applicant. the written and oral submissions advanced during the personal hearing. I have also examined the relevant provisions of the Customs Act, 1962, the First Schedule to the Customs Tariff Act, 1975, the General Rules for the Interpretation of the Import Tariff(GRI), the IISN Explanatory Notes and the judicial precedents relied upon by the Applicant.
6.2 In order to maintain an application before the Authority ibr Advance Rulings, the Applicant is required to satisfy the conditions and fulfil the requirements prescribed under the Customs Act, 1962 (hereinafter referred to as the “Customs Act”).
6.3 The provisions governing advance rulings are contained in Chapter VI3 of the Customs Act. In this regard, clause (c) of Section 28E of the Customs Act defines the term “Applicant” as follows:
..In this chaplet; unless the context otherwise requires, “applicant” means-
holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);
… [Emphasis Supplied!
In view of the above, the Applicant has been granted a valid importer-Exporter Code (IFC) under Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. The Applicant’s IEC is AAJCT52561:. Accordingly, the Applicant is duly recognised as an importer under the applicable foreign trade and customs laws and is eligible to seek an advance ruling in respect of the proposed import transactions.
Further, clause (b) of Section 281.; of the Customs Act, 1962 defines the term “advance ruling” as follows:
“(b) “advance ruling” means a written decision on any of the questions referred to in section 2811 raised by the applicant in his application in respect of any goods prior to its importation or exportation; “
… [Emphasis Supplied!
6.4 The first ‘schedule to the Customs Tariff Act, 1975mandates the General Rules of Interpretation (GRI) which are to be applied to determine classification under the Customs Tariff: Classification of goods in this Schedule shall be governed by the following principles:
1. The titles of Sections, Chapters and sub-Chapters are provideclPr ease of reference only; .for legal purposes, classification ,shall be determined according 10 the terms of the headings and any relative Section or Chapter Notes and, provided .such headings or Notes do not otherwise require, according to the following provisions:
………………
3. When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be affected as follows:
(a) The heading which provides the most specific description shall be preferred to providing a more general description. Howevell when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only 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 view of the above, the Section Notes or Chapter Notes and Sub-I leading Notes give detailed explanation as to the scope and ambit of the respective Sections and Chapters. These notes have been given statutory backing and have been incorporated at the beginning of each Chapter.
6.5 At the outset, it is observed that the applicant seeks an advance ruling on the classification of the goods proposed to be imported, described as “Integrated Rack Server”. The applicant proposes to classify the said goods under CTI 8471 50 00.
I find that the questions raised by the applicant for advance ruling arc covered under Section 2811(2)(a) of the Customs Act. 1962, as they relate to the classification of goods. In terms of Section 2811(2)(a) of the Customs Act, 1962, an applicant may make an application–for an advance ruling in respect of questions relating to the following matters:
(a) Classification of goods wider the Customs Tariffl Act
… [Emphasis Supplied]
6.6 The applicant had filed an application in Form CAAR-1under Section 2811 of the Customs Act, 1962, before the competent authority seeking an Advance Ruling on the appropriate classification of the goods namely, “Integrated Rack Server” proposed to be imported by the Applicant. The Applicant has sought determination of the appropriate tariff classification of the said goods under the First Schedule to the Customs TariffAct, 1975, having regard to their submission.
The issue for determination essentially concerns whether the subject goods, which arc imported as –Integrated Rack Server” are appropriately classifiable as processing units under ileading 8471 more specifically under CT1 8471 50 00 of the First Schedule of the Customs –Isariff Act, 1975.
6.7 Before deciding the classification of the subject goods, it is important to understand the product namely, “Integrated Rack Server” for use in the Automatic Data Processing Machine (ADPM).
A. Nature and Description of the Imported Goods
The applicant submitted that the subject goods is a type of server hardware designed to be mounted in a server rack and often pre-integrated with components or systems that allow it to function as part of a large, managed IT environment. An “Integrated Rack Server” is a rack-mountable server system comprising the principal computing components, such as processors, memory and storage, together with other integrated components and systems required for deployment in an enterprise or data-centre environment. Depending upon the configuration. the system may incorporate power distribution and power supply units, networking components, cooling and temperature-regulation systems, cable-management arrangements, mounting fixtures, and hardware and software for system monitoring and management.
B. Statement Containing the Applicant’s Interpretation of Law and/or Facts
The Applicant has submitted that it proposes to import “Integrated Rack Servers” into India. According to the Applicant, the Integrated Rack Server constitutes a system comprising a number of separate units and components, which may include transceivers, networking cables, network modules, server units, processors, memory, storage devices, enclosures, power supply units, cooling systems, mounting fixtures, temperature-regulation systems, cable-management arrangements, expansion modules and networking equipment such as routers and switches.
The Applicant has further submitted that these components arc integrated into a rack-mounted configuration to provide a high-performance computing and data-processing system for enterprise and data-centre applications. On the basis of the aforesaid composition, features and functions.
7. GENERAL RULES FOR THE INTERPRETATION OF THIS SCHEDULE:
Classification of goods in this Schedule shall be governed by the following principles:
1. The titles ofSections, 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 (i/id any relative Section or Chapter Notes anti, provided such headings or Notes do not otherwise require, according to the following provisions:
…………
(Emphasised supplied)
UnderGeneral Interpretative Rule 1(“GIR 1”), the classification of goods under the Customs Tariff is required to be determined, in the first instance, in accordance with the terms of the headings and the relevant Section and Chapter Notes. GIR 1 establishes the primary statutory framework for tariff classification and requires the classification exercise to commence with an examination of the precise wording of the competing tariff headings, read together with the applicable statutory Notes. Accordingly, where the terms of a heading, read with the relevant Section or Chapter Note, expressly cover or exclude particular goods, effect must be given to such statutory provisions before resort is had to any .other interpretative rule.
Accordingly, the ‘classification is required to be determined • with reference to the objective characteristics and functions of the imported goods and the applicable provisions of the Customs Tariff, rather than merely by reference to the system or apparatus in which the unit is ultimately installed or integrated.
8. For the determination of the classification of the goods (Integrated Rack Server), the Chapter 8471 is reproduced below:
| HS Code | Item Description |
|---|---|
| 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, weighing not more than 10 kg., consisting of at least a central processing unit, a keyboard and a display: |
| 8471 30 10 | — Personal computer |
| 8471 30 90 | — Other |
| – 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: | |
| 8471 40 10 | — Micro computer |
| 8471 41 20 | — Large/main frame computer |
| 8471 40 90 | — Other |
| 8471 49 00 | – Other, presented in the form of systems |
| 8471 50 00 | – Processing units other than those of sub- heading 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units |
| 8471 60 | – Input or output units, whether or not containing storage units in the same housing: |
| 8471 80 00 | – Other units of automatic data processing machines |
| 8471 90 00 | – Other |
In view of the above, it is pertinent to mention that the classification of the goods, named “Automatic Data Processing Machine” (ADPM) under I leading 8471 is required to be examined specifically with reference to Chapter Note 6 to Chapter 84. The said Chapter Note lays down the statutory parameters for determining the goods that fall within the scope of I leading 8471 and, therefore, constitutes an integral part of the legal framework governing their classification. The question whether the goods are appropriately classifiable under IIeading 8471 cannot be determined merely by reference to their commercial description, nomenclature or intended application. Rather, the relevant characteristics and functions of the goods must be examined against the criteria prescribed in Chapter Note 6 to Chapter 84 and the classification must follow from the application of that Note to the goods in question.
8.1 Note 6 of Chapter 84 is reproduced below:
“6. (A) For the purposes of heading 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. beingfreely programmed in accordance with the requirements of the user; (Hi) Pell brining arithmetical computations specified by the user; and
iii. Executing, without human intervention, a processing programme which requires them to modify their execution, by logical decision during the processing run.
(13) Automatic data processing machines may be in the form of systems consisting of a variable number of sperate
(C) Subject to paragraph (1)) and (E), a unit is to be regarded as being part ofan automatic data processing system if it meets all the following conditions:
i. it is of a kind solely or principally used in an automatic data processing system:
ii. it is connectable to the central pmces.ving unit either directly or through one or more other units; and
iii. it is able to accept or deliver data in a Prm (codes or signals) lithich can be used by the system. Separately presented units of an automatic data processing machine are to be classified inheading 8471.
However, keyboards, Ar–Y .w-ordinate input devices and disk storage units which satisfy the conditions of (ii) and (iii) above, are in all cases to be classified as units of heading 8471.
(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 camera, digital cameras and video camera recorders:
v. Monitors and projectors, not incorporating television reception apparatus.
(h) Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific fitnction other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.”
i. Standalone Technical Criteria: in view of the above, it is pertinent to mention that to qualify for classification under Heading 8471, the imported unit must satisfy the legal criteria laid down in Chapter Note 6(A) to Chapter 84, an “Automatic Data Processing Machine’s” is defined as a machine capable ‘on
iii. Program & Data Storage: It must be capable of Storing processing programs and execution data and at least the data immediately necessary for the execution of the programme.
iii. Freely Programmable: It must be freely programmable in accordance with user requirements.
iv. Arithmetical Computations: It must perform arithmetical computations specified by the user.
v. Logical Execution: It must execute, without human intervention, a processing program requiring logical decisions during execution.
vi. Chapter Note 6(B) & 6(C) — Processing Units Presented Separately:
An ADPM may consist of separate units. A processing unit presented separately falls under Customs Tariff Item 8471 50 00 if it incorporates standard Central
The unit comprises processors, motherboards, RAM, SSD/I IDD storage, graphics processing capabilities (GPUs), network interface cards (NIC), power supply, and standard input/output interfaces.
Technically, it performs core data processing functions including operating system execution. mathematical computation, DICOM digital image processing and rendering, database management, and communication via standard network protocols (Ethernet).
Iii the instant case, the applicant has described the goods as an “Integrated Rack Server”; however, the application does not appear to contain complete and unambiguous details regarding the exact configuration, architecture and functional characteristics of the proposed system. In particular, complete technical literature/data sheets, model-wise specifications, configuration details, details of the individual hardware components incorporated in the rack, their respective functions, manner of interconnection, software, storage and processing capabilities, networking functionality and the manner in which the individual components operate as an integrated system are required for proper examination of the classification issue. Neither of these details was submitted nor brought on record during the Personal I !caring.
The absence of such material particulars makes it difficult to ascertain the exact identity, composition, essential characteristics and principal function of the goods proposed to be imported. Consequently, the classification question raised by the applicant cannot be examined conclusively merely on the basis of the generic description “Integrated Rack Server”.
It is therefore considered necessary that for determination of classification of goods under Chapter 8471 (Automatic Data Processing Machine) subject to Note 6(A) of Chapter 84, complete technical specifications, manufacturer’s product literature/catalogue, detailed configuration and any other documents relevant for determining the classification of the goods.
Further, the applicant has not, on the basis of the information presently available, sufficiently demonstrated the essential character and principal function of the complete imported system. It is necessary to establish whether the predominant function of the imported goods is data processing, data storage, network communication, or any combination thereof, And how the individual components contribute to the overall functionality of the system. This assumes particular significance where classification is proposed under a heading covering automatic data processing machines 0r other headings covering individual apparatus or equipment.
The applicant should therefore furnish a complete component-wise configuration of the rack, including the number and type of server units/nodes, processors, memory, storage devices, network switches, routers or other networking equipment, power and cooling equipment, management modules and other apparatus included in the shipment. The applicant should also clearly indicate whether such components arc imported together as one complete system, whether they are mechanically/electronically interconnected, whether they arc capable of independent operation, and whether any component performs a function other_ than data processing.
It is pertinent to note that an advance ruling under Section 281-I of the Customs Act, 1962 can be soughtin respect of, inter alia, the classification of goods under the Customs Tariff Act, 1975: Therefore, the goods in respect of which the ruling is sought must be sufficiently identified so that the classification question can be examined with reference to their actual characteristics. A ruling, cannot be issued merely upon a broad or generic commercial description, without complete technical particulars establishing the identity and functionality of the goods.
For an integrated rack server, the paragraph should specifically test the applicant’s claim of classification under CTH 8471 as an Automatic Data Processing (ADP) machine against Note 6(A) of Chapter 84 and then examine whether the complete rack qualifies as an ADP system under Note 6(B) and whether its constituent units satisfyNote 6(C).Note 6(E) can then be considered where any incorporated/connected machine performs a specific function other than data processing.
Thus, mere description of the goods as a “integrated rack server'” does not, by itself, establish that the complete imported goods constitute an ADP machine falling under ‘leading 8471. The applicant is required to demonstrate, with reference to the actual technical configuration of’ the goods proposed to be imported, that the machine/system satisfies the requirements stipulated in all the limbs of Note 6(A) of Chapter 84.
In view of the above, the applicant’s claim for classification under I leading 8471 cannot be determined merely on the basis of the commercial description “Integrated Rack Server”. The applicant is required to establish, through complete technical documentation, that the imported goods satisfy the requirements of Note 6(A) and, where the goods comprise multiple units, the relevant requirements of Notes 6(B) and 6(C), while also demonstrating that no constituent machine is excluded from I leading 8471 by virtue of Note 6(17😉 or any other applicable provision.
8.2 The relevant provisions of Section 281 of the Customs Act, 1962 are reproducedhereinbelo w:
“SECTION 28-1. Procedure on receipt of application. (1) on receipt of an application, the Authority shall cause a copy thereof to be forwarded to the [Principal Commissioner of Customs or Commissioner ()f Customs and, if necessary, call upon him to. furnish the relevant records:
Provided that where any records have been called for by the Authority in any case, such records shall, as soon as possible, be returned to the Principal Commissioner of Customs or Commissioner of Customs.
(2) The Authority may, after examining the application and the records called for,by order, ei ther allow or reject the application:
On perusal and examination of the application submitted by the Applicant, it appears that the particulars and supporting details furnished therein are not sufficient to establish compliance with the conditions specified under Note 6(A) to Chapter 84 of the First Schedule to the Customs Tariff Act, 1975 or to enable a proper and meaningful determination of the classification of the goods in question.
Since the Applicant has sought an advance ruling specifically in respect of the classification of the subject goods, it is incumbent upon the Applicant to identify and describe the goods with sufficient precision and to furnish all material facts and technical particulars having a bearing on their classification. In the absence of such information, the classification of the goods cannot be determined with the requisite clarity and certainty.
Accordingly, the present application is not maintainable in terms of sub-section (2) of Section 28-1 of the Customs Act, 1962..
9. In view of the forgoing facts and records of case, I hereby observe and hold that the application is accordingly being treated as deficient in respect of the technical particulars necessary for determination of the classification question
10. Therefore, the application is hereby disallowed and disposed of accordingly.
