Case Law Details
In re Audio Distribution House Pvt. Ltd (CAAR Mumbai)
CAAR hels that Creative Touch 5-series Interactive Flat Panel (IFP) merit classification under sub heading 84714190 of the first schedule to the Customs Tariff Act, 1975.
FULL TEXT OF ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s. Audio Distribution House Pvt. Ltd. (hereinafter referred to as ‘the applicant’, in short) 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 20.12.2021 along with its enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’). The applicant is seeking advance ruling on the classification of Creative Touchy-series Interactive Flat Panel (IFP) (Model – 5652RK, 5752 RK &5852RK) which they intend to import.
2. The applicant indicated that they propose to import Creative Touch 5-series Interactive Flat Panel (IFP) (hereinafter referred to as the ‘subject item’). The subject item is an All-in-one (AIO) computer system, functions like a large size tablet computer, and has an inbuilt Mother Board, MT9950 (Quad Core A73) Micro Processor (CPU), Quad- core Mali G52 Graphics Card, 4GB RAM and 32 GB SSD storage. It also has an embedded Android system pre-loaded with Android 9.0 (Oreo) Android Operating System (OS). The applicant is of the view that the subject item is classifiable under customs tariff entry 84 714190. They intend to import the said goods from China through Nhava Sheva port. Accordingly, comments from the jurisdictional Commissioner of Customs were invited. However, no response has been received.
3. The applicant has submitted a detailed write up describing the functions and utilities of the subject goods proposed to be imported by them. It is submitted that the subject item is 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 item is not merely a display unit, and rather is a computer system 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 applications and cloud storage. The screen recording capabilities of this IFP enables easy saving of meetings, lessons or notes for later viewing or sharing. It is submitted that the panel has an “Embedded Android system” preloaded with Android 9.0 (Oreo) Android Operating System (OS) which delivers incredible software functionality, including a 4K-optimized 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. The subject item has two variants in this Optional Module (a) OPS2-15, which consists of Quad-core Intel Core i5 8250U Micro Processor (CPU), 8 GB DDR4 RAM, Intel UHD Graphics 620 Graphics Card and 128GB SSD; and (b) OPS2-17, which consists of Quad-core Intel Core i7 8550U Micro Processor (CPU), 8 GB DDR4 RAM, Intel UHD Graphics 620 Graphics Card and 256GB SSD. In addition, the panel provides enhanced protection via programmable PIN code and USB port disable function, thereby ensuring that the Optoma 5-series IFP is safe and secure for any environment. As per Webopedia, the term, “All-in-one Computer System” is defined as follows, ‘An All-in-One (A10) 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 panel body. Like a tablet computer system, the subject item 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 9.0 (Oreo), and desktop operating systems like Microsoft Windows, 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.
4. The personal hearing in the matter was held on dtd. 20.01.2022 in the virtual mode. Shri. L. Gokulraj, Adv. represented the applicant and explained the product specification as well as the relevant tariff heading. Special emphasis was laid on the chapter note 5(a) to chapter 84. He also briefed me about the US customs cross ruling in respect of Clever Touch Plus Monitors. He is of the opinion that the device under consideration merits classification under tariff entry 84714190. No one represented the jurisdictional Commissioner of Customs in the hearing.
5. From the submission of applicant as well as the information available, the subject item termed as Creative Touch 5-Series Interactive Flat Panel (IFP), is described as an ADP machine consisting of an integrated system with Central Processing Unit, Mother Board, Graphic Card, Memory (RAM + Storage), graphic processing unit, touch screen as virtual key board as an input device and video display unit as an output device, all in one place, within the display’s body. The subject item typically come loaded like a tablet computer system, with a mobile operating system and touch screen display processing circuitry, and can be used with either of the operating systems, i.e., mobile operating system like Android 9.0 (Oreo) and/or desktop operating systems like Microsoft Windows, Apple Mac and Chrome OS. It has been suggested that the subject item merits classification under sub heading 84714190 as it satisfies all the requirements as mandated under Note 5 (A) to Chapter 84 of Customs Tariff Act, 1975 i.e., the machine is capable of: –
(i) storing the processing program necessary for the execution of the program;
(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 program which requires them to modify their execution, by logical decision during the processing run.
It is further submitted that the subject item “Optoma Creative Touch 5-Series Interactive Flat Panel”, has the necessary hardware memory (RAM+ Storage- SSD), in which the operating system as well as other software programs are stored to execute the data processing process, thereby satisfying the condition 5(A)(i) of the chapter notes. The software loaded in the IFP being freely programmable in accordance with the requirements of the user, fulfils the condition 5(A)(ii) of the chapter notes. Creative Touch 5-Series Interactive Flat Panel, performs arithmetical computations specified by the user which satisfies the condition 5(A)(iii) of the chapter notes. And it has a processing program, which makes it capable of modifying their execution by logical decision during the processing run, satisfying the condition 5(A)(iv) of the chapter notes.
6. I have considered all the materials placed before me in respect of the subject item for which an advance ruling has been sought. I 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 impugned subject item, I proceed to pronounce ruling on the issue on the basis of information available on record. The subject item 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 Creative Touch 5-series Interactive Flat Panel’ can be considered as ADP machines.
Heading 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 41 — Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined.
The digital data processing machines of this heading must be capable of fulfilling simultaneously the conditions laid down in Note 5 (A) (a) to this Chapter. That is to say, they must be 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.
Thus, machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, are excluded even though the user may be able to choose between a number of such fixed programs. The digital data processing machines have storage capability and also stored programs which can be changed from job to job. 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 usually automatic, by the use of data media such as magnetic tapes, or by direct reading of original documents, etc. There may also be arrangements for manual input by means of keyboards or the input may be furnished directly by certain instruments (e.g., measuring instruments). The input data are converted by the input units into signals which can be used by the machine, and stored in the storage units. Part of the data and program or programs may be temporarily stored in auxiliary storage units such as those using magnetic discs, magnetic tapes, etc. But these machines must have a main storage capability which is directly accessible for the execution of a particular program and which has a capacity at least sufficient to store those parts of the processing and translating programs and the data immediately necessary for the current processing run. Digital data processing machines may comprise in the same housing, the central processing unit, an input unit (e.g., a keyboard or a scanner) and an output unit (e.g., a visual display unit), or may consist of a number of interconnected separate units. In the latter case, the units form a “system” when it comprises at least the central processing unit, an input unit and an output unit (see Subheading Note 1 to this Chapter).
7. As already discussed above, complete digital data processing system must comprise, at least:
(1) A central processing unit which generally incorporates the main storage, the arithmetical and logical elements and the control elements; in some cases, however, these elements may be in the form of separate units.
(2) An input unit which receives input data and converts them into signals which can be processed by the machine.
(3) An output unit which converts the signals provided by the machine into an intelligible form (printed text, graphs, displays, etc.) or into coded data for further use (processing, control, etc.).
Two of these units (input and output units, for example) may be combined in one single unit. Two or more of these systems may be interconnected, thus constituting, e.g., a local area network (LAN). These systems may include remote input or output units in the form of data terminals. Such systems may also include peripheral units, apart from the input or output units, designed to increase the capacity of the system, for instance, by expanding one or more of the functions of the central unit.
8. From the above considerations, it fairly comes out that the following conditions of Note 5 (A) to Chapter 84 of Customs Tariff Act, 1975 are fulfilled: –
(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.
9. Open source information as well as the submissions of the applicant portrays the subject item as an AIO which is a fully functional ADP machine that operates without restrictions. The A10 is equipped with hardware and software that allow it to perform, without artificial constraints, general computing tasks, where users are free to add or remove applications of their choosing.
10. In view of my aforesaid discussions, I rule that Creative Touch 5-series Interactive Flat Panel (IFP) merit classification under sub heading 84714190 of the first schedule to the Customs Tariff Act, 1975.
