In Re Netlink ICT Private Limited (CAAR Mumbai)
Customs Authority for Advance Ruling (CAAR) in Mumbai has ruled that imported Interactive Flat Panels will be classified under Customs Tariff Item (CTI) 8528 59 00 of the Customs Tariff Act, 1975. This ruling came in response to an application filed by M/s. Netlink ICT Private Limited, an importer of “Fiber to the home” (FTTH) products, seeking classification for their ‘Hynits’ brand Interactive Flat Panels.
Netlink ICT argued that the Interactive Flat Panels, equipped with features like a CPU, RAM, Android 13 operating system, multi-touch capability, and the ability to connect to external devices, should be classified as automatic data processing machines (ADPMs) under CTI 8471 41 90. They contended that the panels met all the criteria outlined in Chapter Note 6(A) of Chapter 84, which defines an ADPM. The applicant also cited several previous advance rulings that had classified similar interactive flat panels under the same CTI.
However, the jurisdictional Commissionerate of Customs, Import-II, Chennai, argued against this classification. They stated that while the Interactive Flat Panels incorporate an ADPM (inbuilt CPU), their primary function is that of a display device with interactive capabilities, used for training, conferences, and educational purposes. The Commissionerate cited Chapter Note 6(E) to Chapter 84, which states that machines performing a specific function other than data processing should be classified according to their respective functions. They also referred to a ruling by the Customs Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, in the case of Commissioner of Customs (Import & General), New Delhi Vs Integral Computer Ltd., which classified interactive electronic whiteboards under the heading for monitors (8528).
CAAR Mumbai, after considering the submissions and the relevant legal provisions, noted significant changes in Chapter 85 of the Customs Tariff Act following the Government of India Budget 2025. The budget increased the Basic Customs Duty (BCD) on Interactive Flat Panel Displays (CBU) classified under CTI 8528 59 00 from 10% to 20%, effective February 2, 2025. Furthermore, the Tax Research Unit (TRU) issued Circular No. 12/2025-Customs dated April 7, 2025, specifically clarifying that Interactive Flat Panel Displays are classifiable under tariff item 8528 59 00 and subject to a 20% BCD. The circular also provided technical guidance to distinguish IFPDs from other monitors.
The authority emphasized that circulars issued by the Central Board of Indirect Taxes and Customs (CBIC) are binding on revenue authorities, citing the Supreme Court’s rulings in CCE v. Mideast Chemical Industries and CCE, Balpur v. Ratan Melting & Wire Industries. Given the recent legislative changes and the Board’s clarification, CAAR Mumbai concluded that the Interactive Flat Panels imported by Netlink ICT should be classified under CTI 8528 59 00, aligning with the amended tariff structure and the Board’s directive. The previous advance rulings cited by the applicant were deemed irrelevant due to the change in law.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
