Case Law Details
In re Audio Distribution House Pvt Ltd (CAAR Mumbai)
Customs Authority for Advance Rulings (CAAR), Mumbai, issued an order rejecting the application filed by M/s. Audio Distribution House Pvt Ltd. The applicant sought an advance ruling regarding the classification of “Optoma Creative Touch 5-Series Interactive Flat Panels” under the Customs Tariff Item (CTI) 84714190, arguing that the product functions as an all-in-one (AIO) computer system. The application was filed under Section 28H (1) of the Customs Act, 1962. The company contended that the device, with its integrated motherboard, processor, RAM, storage, and touchscreen, met the criteria for classification as an automatic data processing (ADP) machine.
During multiple hearings, the applicant reiterated that the product was a fully functional computer with extensive connectivity and compatibility with various operating systems, including Windows, Mac, and Chrome OS. They also argued that the panel fulfilled the conditions outlined in Note 5(A) of Chapter 84, qualifying it as an ADP machine. However, CAAR Mumbai examined the technical specifications and observed that similar classification issues had already been addressed in prior rulings. The authority referred to the case of M/s. Ingram Micro India Private Limited vs. Principal Commissioner of Customs (Import), New Delhi (Final Order Nos. 50076-50077 of 2022), where CESTAT Delhi classified a comparable interactive display system under tariff heading 8471.
The applicant attempted to distinguish their product from the one addressed in the CESTAT ruling, arguing differences in model numbers and technical specifications. However, CAAR Mumbai found that the products shared significant similarities in terms of functionality, including high-resolution touchscreens, built-in Android OS, and multiple connectivity options. Since the fundamental nature and intended use of both products were aligned, the authority ruled that the applicant’s product could not be considered separately from the precedent set by CESTAT Delhi.
Referring to Section 28-I(2) of the Customs Act, 1962, CAAR Mumbai highlighted that an advance ruling cannot be granted if the issue has already been decided by a higher authority. As the classification of interactive flat panel displays had already been settled by CESTAT, and no stay was granted by the Hon’ble High Court on the ruling, CAAR Mumbai denied the application. The order reaffirmed the applicability of prior judicial precedents and disposed of the application accordingly.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s. Audio Distribution House Pvt Ltd., (having IEC No. 0316958760) and hereinafter referred to as ‘the applicant’, in short) filed application (CAAR-1) 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 21.05.2024 along with enclosures in terms of Section 28H (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 “Optoma Creative Touch 5-series Interactive Flat Panel (Model No. — 5653RK, 5753RK and 5863 RK)” under CTI 84714190 (Other automatic data processing machines) of the First Schedule of the Customs Tariff Act, 1975.
2.1 The applicant informed that they are intending to import ” Optoma Creative Touch 5-series Interactive Flat Panel (Model No. — 5653RK, 5753RK and 5863 RK) (herein after referred as ‘subject goods), from China, Taiwan and Vietnam. The subject goods are an All-in-one (AIO) Computer System, function like a large size tablet computer, and has an inbuilt Mother Board, Octa Core (Quad-Core A76 + Quad-Core A55) Micro Processor (CPU), ARM Quad-Core Mali G610 MC4 Graphics Card (GPU), 8GB RAM, and 64 GBStorage (ROM). It also has an Embedded Android Operating System (OS) pre-loaded with Android 13 and has compatibility with Windows 10, Windows 11, Mac and Chrome OS. The applicant is of the view that the subject goods are classifiable under CTH 8471 4190.
2.2 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 (ROM)], 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. The Screen recording capabilities of this IFP enable easy saving of meetings, lessons or notes for later viewing or sharing.
2.3 The applicant submitted that the Panel has an “Embedded Android system” pre-loaded with Android 13 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.
2.4 The subject goods also consists 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 13, 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.
2.5 The applicant submitted that subject goods “Optoma Creative Touch 5-Series Interactive Flat Panel”, has the necessary Hardware Memory (RAM+ Storage(ROM)], 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. other words, the subject goods fulfills 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.
2.6 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.
3. A personal hearing in the matter was conducted on 18.07.2024 at 04.30 PM, through virtual mode. Shri Hari Radhakrishanan, authorized representative of the applicant, appeared for hearing and he reiterated the contention filed with the application. He submitted that the goods in question are creative touch 5-series Interactive Flat Panel (IFP). These models have integrated system with CPU, mother board, graphic card, RAM, ROM, touch screen input and video display etc. and have characteristics of computer system compatible with Windows, MAC and Chrome OS. He contended that the subject goods merit classification under CTI 84714190.
A subsequent personal hearing in the matter was conducted on 06.01.2025 at 12.00 PM, through virtual mode. Shri Hari Radhakrishanan, authorized representative of the applicant, appeared for hearing and he reiterated the contention filed with the application. He sought some time to file additional submission in this matter.
The next personal hearing in this matter was conducted on 10.02.2025 at 12.00 PM, through virtual mode. Shri Madan G., the authorized representative of the applicant, appeared for the hearing and reiterated the arguments presented in the application, asserting that the subject goods, namely Creative Touch 5-Series Interactive Flat Panel Displays (IFPDs) of different models as submitted, are all-in-one computer system which functions like large tablet computer and has integrated system-CPU, Mother Board, Graphic Card, Memory (RAM+ROM), Touch Screen (Input) and video display (out put device) and merit classification under CTI 84714190. During the hearing, it was also discussed that changes were introduced in the Budget 2025 concerning the classification and rate of duty applicable to Interactive Flat Panel Displays. He further informed that in similar cases of advance rulings issued by CAAR, Mumbai and CAAR, Delhi, the department has filed appeals, which are currently pending before the Hon’ble High Court of Madras, but there is no stay in operation against the said ruling.
No one appeared on behalf of the Department during these hearing.
4. Here, I observe that the Hon’ble CESTAT Delhi in the case of M/s. Ingram Micro India Private Limited Vs. Principal Commissioner of Customs (Import), New Delhi (Final Order Nos. 50076-50077 of 2022 in Appeal Nos. C/50708-50709/2021, decided on 2-2-2022] while deciding the classification of goods namely (Viewboard) Viewsonic Interactive Display System held that the same would be classified under Tariff heading 8471 as. an: automatic data processing machine since it satisfies the test for an ADP machine under the said Amading prescribed under. Note 5 (A) to chapter 84 by application of GRI 1.
5. I have perused the technical functions and parameters of the subject goods for which an advance ruling has been sought. Additionally, I have examined the technical functions and specifications of the products, namely View Board – ViewSonic IFP6550-2/65″ and View Board -ViewSonic IFP7550-2/75″, which were involved in the case of M/s. Ingram Micro India Private Limited vs. Principal Commissioner of Customs (Import), New Delhi. Upon analysis, I find that the issue of classification of the subject goods namely “Optoma Creative Touch 5-Series Interactive Flat Panel” in the present case is similar to the matter already decided by CESTAT Delhi in the aforementioned case.
The applicant vide their email dated 01.02.2025, has stated that the model numbers of the products covered under the aforementioned judgment differ from those of the subject goods in the present case. They have also claimed that the technical parameters and specifications of the products addressed in the judgment differ from those of the subject goods.
In this regard, I have observed that the subject goods, Optoma Creative Touch 5-Series Interactive Flat Panel, and the products covered under the aforementioned judgment, ViewBoard -ViewSonic 1FP6550-2/65″ and ViewBoard – ViewSonic IFP7550-2/75″, share significant similarities in terms of technical specifications and functionality. Both products are advanced interactive flat panels designed for collaborative learning, presentations, and professional use. They feature high-resolution touchscreens with multi-touch capabilities, enabling seamless interaction through finger touch input. Additionally, both models are equipped with integrated Android operating systems, multiple connectivity options (such as HDMI, USB, and wireless casting), and built-in speakers to enhance user experience. Their core functionalities, including digital whiteboarding, screen sharing, and interactive display capabilities, remain fundamentally the same, making them comparable in terms of technical performance and intended use.
Therefore, I do not agree with the applicant’s claim that the subject goods are different from the products covered under the aforementioned judgment.
6. The relevant excerpts of subsection (2) of section 28-1 of Customs Act, 1962 is produced below:
“(2) The Authority may, after examining the application and the records called for, by order either allow or reject the application;
Provided that the Authority shall not allow the application where the question raised in the application is-
(a) already pending in the applicant’s case before any officer of customs, the Appellate Tribunal or any Court;
(b) same as in a matter decided already by the Appellate Tribunal or any Court:”
7. In view of the forgoing facts and records of the case, I hereby observe and hold that the question raised in this very application has already been decided by the Hon’ble CESTAT, Delhi in its order dated 02.02.2022 in the case of M/s. Ingram Micro India Private Limited Vs. Principal Commissioner of Customs (Import), New Delhi [Final Order Nos. 50076-50077 of 2022 in Appeal Nos. C/50708-50709/2024 I further observe that the Customs Authority for Advance Ruling, Mumbai as well as Delhi, has issued multiple rulings wherein the ratio of the judgment passed by the Hon’ble CESTAT, Delhi, in the aforementioned case has been followed. Accordingly, I am of the view that the classification matter of Interactive Flat Panel Display has already been decided by the Appellate Tribunal and there is no stay by the Hon’ble High Court on the orders passed by the authority concerning the classification of Interactive Flat Panel Displays. Therefore, in accordance with the provisions of Section 28-1 (2) and proviso (b) of the sub-section (2) of Section 28-1 of Customs Act, 1962, I hereby do not allow the application in as much as the matter has already been decided by the Appellate Tribunal.
8. The application is not allowed and disposed of accordingly.
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