In re Brightpoint India Pvt Ltd (CAAR Mumbai)
In regards to the classification opinion of the 68th session of the Harmonized System Committee, it is observed that the committee has classified RFID/barcode readers with a mobile operating system capable of scanning and cellular connectivity under subheading 851713. This subheading covers smartphones. Note 5 to chapter 85 states that “For the purposes of heading 85.17, the term “smartphones” means telephones for cellular networks, equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems”. The note clearly states that these devices are telephones for cellular networks designed to perform the functions of ADP machines. However, the devices under consideration are principally not telephones for cellular networks. In fact, 18 out of 32 models do not have the functionality of cellular connectivity, which shows that the SIM is not an integral part of these devices, as these devices are able to perform their primary function with or without the SIM card. These devices do not appear to be convenient for the purpose of telephony. As per circular no. 20/2013- Cus, dated 14.05.2013, “the difference between a “smartphone” and “tablet computer”, is not based on whether the product has a voice calling function or not, but on the principal features that a producer has intended for the device when designing and developing it”. The manufacturer is advertising these products as mobile computers/ handheld computers/ tablet computers. On their website (htms://sps.honeywell.com/us/en/products/productivity/mobile-computers), the manufacturer mentions that their collection of mobile and vehicle-mounted computers are purpose-built for specialized operations, including retail-in-store, warehouses and distribution centres, transportation and logistics, courier/express/parcel delivery, manufacturing, service, fleet management, government. Elaborating on the mobile computers/ handheld computers they specify that “Honeywell rugged handheld mobile computers are small and lightweight yet provide industry-targeted features and functionality with a level of enterprise performance and rugged durability consumer-grade devices weren’t designed for. On site or in the field from simple data capture scanning to using complex, data-intensive software our handheld computers accelerate and error-proof many applications, including in-store merchandising, inventory management, order picking, receiving and putaway, parts tracking, quality control and safety inspections and more”. Therefore, these devices are essentially ADP machines with additional connectivity capabilities, including cellular connectivity for 14 models, as discussed in para. 5.1. Further, the difference between a smartphone and the devices under consideration is already outlined in para 2.4. The impugned devices have many features such as higher scanning capacity, data editing functionality, ruggedness and enterprise-level security features, which a smartphone for cellular connection lacks. These devices are used by enterprises to capture data. The products are used in inventory management, store receiving, order processing, package tracking, tracing delivering etc. These devices use wi-fi connectivity and bluetooth for information sharing. Cellular connectivity is essentially used for GPS and information sharing, where wi-fi is not available. Cellular connectivity is also used for making calls. However, as mentioned earlier, 18 out of 32 models do not have cellular connectivity. On a similar device, the TC77 series touch computer, which is a handheld mobile computer used for asset inventory management purposes, Singapore Customs ruled (ref. No. CRL-211217-0036) that the product is classifiable under subheading 84713090. Therefore, notwithstanding the WCO classification advice to the contrary, it is my considered opinion that the devices under consideration are not classifiable as smartphones. They merit classification under subheading 84713090.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
Brightpoint India Pvt Ltd. (hereinafter, the applicant) situated on the 5th Floor, Building A, Empire Plaza, LBS Marg, Vikhroli West, Mumbai-400083 and having IEC No. 0503077411, filed an application dated 08.03.2022 seeking advance rulings on the classification of Honeywell International Inc portable computers viz. vehicle-mounted computers, tablet computers and mobile computer, having the following model numbers: –
