Case Law Details
In re Gurmat Impex & Shipping Services (CAAR Mumbai)
Chapter 8471 covers, “Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines processing such data, not elsewhere specified or included.” As per Chapter notes 6(C) of Chapter 84, read with para (D) and (E ), a unit is to be regarded as being part of an automatic data processing system, if it meets all of 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 processing unit either directly or through one or more other units; and (iii) It is able to accept or deliver data in a form (codes or signals) which can be used by the system. I find that the subject goods do not have a built in USB driver or SD card external storage connectivity, thus they cannot be used without an ADPS, instead it has VGA port that enables receiving signal from a CPU or storage device and has a HDMI port which is a proprietary audio/video interface for transmitting data digitally. Consequently it is that the subject goods meet the criteria as laid down in the relevant chapter note, reproduced above, so as to be regarded as being part of an automatic data processing system falling under CTH 8471.
It is seen that Chapter note 6(C) is to be read with paragraph (D) & (E). Paragraph 6(D) inter alia specifies, that heading 8471 does not cover, “Monitors, not incorporating television reception apparatus” when presented separately. And paragraph 6(E), states that, “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.
I find that subject goods can be regarded as being part of an automatic data processing system as it meets all of the conditions specified in Chapter notes 6(C) of Chapter 84. Further, the absence of built in USB driver, SD card external storage connectivity and touch screen capability ensures that the principal function of the subject goods is connecting to an ADPS. However as per paragraph 6(D) & 6(E), monitors, not incorporating television reception apparatus when presented separately, cannot be classified under Chapter heading 8471 and have to be classified in the headings appropriate to their respective functions. Accordingly, by virtue of terms of the headings, relative Chapter Notes and HSN Explanatory notes, I find that the subject goods satisfy all essential conditions to merit classification under Chapter sub heading 8528 52 00 as, “Monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471”.
Further Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended exempts “All goods of a kind solely or principally used in an automatic data processing system of heading 8471” falling under heading 852852 from the whole of the duty of Customs leviable thereon. As the impugned goods are held as classifiable under sub-heading 8528 52 00 they are entitled to the duty exemption benefit under the notification mentioned above.
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