In re HID India Private Limited (CAAR Mumbai)
Thermal Printer Ribbon (TPR) cannot be classified under Chapter Heading 9612 as the Thermal Printer Ribbon is different from typewriter/computer printer ribbons because of the difference in the physical characteristics and printing process. CTH 9612 comprises of “Typewriter or similar ribbons, inked or otherwise prepared for giving impressions, whether or not on spools or in cartridges”. The product in question cannot be described as a typewriter or similar ribbons, inked or otherwise, prepared for giving impressions. A typewriter ribbon is typically narrow and thin while the Thermal Printer Ribbon in the present case is wide. Further, the purpose of the typewriter ribbon is to serve as a medium for printing text on paper by impression from impact. In contrast, the purpose of ribbon in TPR is to serve as a medium for printing graphic images and text on an ID plastic card by use of heat. In the thermal printing process, pigmented dye and/or resin is never transferred to the card by means of impact but due to the heat on the printer head. In summary, the functionality and the physical characteristics of Thermal Printer Ribbon and typewriter ribbon are clearly not akin. I agree with this contention of the applicant. Based on section note 2 to Section XVI of the First schedule to the CTA, 1975, case laws referred by the applicant and explanatory notes submitted I find that Thermal Printer Ribbon is correctly classifiable under the CTH 8443 99 59 and not under the CTH 9612.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
1.1 The Applicant, HID India Pvt. Ltd., is engaged in import, sales and distribution of various HID brand products, primarily access control cards, readers and printers. The Applicant proposes to import the products commonly known as “Thermal Printer Ribbon” (“TPR”), which is specially designed for use with thermal ID card printers i.e. DTC and FIDP printers. Applicant submits that similar products imported in the past have been cleared under self-assessment under Customs Tariff Heading (CTH) 8443 (which according to the applicant is the correct CTH) as well as under CTH 9612 (which has been adopted purely for expedient reasons in order to avoid delay in clearance). Applicant states and submits that there has been no authoritative determination on classification of the said product by the proper officer of Customs in the applicant’s own case at any time in the past. The present advance ruling application CAAR-1 is filed to get an authoritative ruling on the issue of classification and taxability of the product in question which can be used in future imports and has sought an advance ruling on following issues:
1. Whether “Thermal Printer Ribbons” (TPR) proposed to be imported by the Applicant is classifiable under Tariff Item 8443 99 59 of the First Schedule to the Customs Tariff Act, 1975?
2. If the answer to the above question is in the negative, then what would be the correct classification of “Thermal Printer Ribbons” under First Schedule to the Customs Tariff Act, 1975?
3. What would be the rate of duty applicable on the import of “Thermal Printer Ribbons”? Applicant in their application has submitted as follows:
1.2 HID’s direct-to-card (DTC) printer ribbons are solely dedicated for use with HID’s dye sublimation/thermal transfer DTC ID card printers. These printers are capable of being connected to an automatic data processing machine (ADP) of heading 8471. The printer is specially designed to print images and text directly on the surface of ID cards, such as employee badges, student identification cards, etc., using heat. HID’s high-definition-printer (HDP) printer ribbons (refer to table above) are solely dedicated for use with HID’s dye sublimation/ thermal transfer HDP ID card printers (known in the industry as a retransfer printer). These printers are capable of being connected to an ADP of heading 8471. The HDP printer is specially designed to print images and text on ID cards (employee badges, student identification cards, etc.). However, instead of printing the image directly on the surface of the card, it first prints the image on HID INTM (Intermediate Transfer Media) film (i.e. retransfer film), which then gets laminated to the surface of the card.
1.3 HID’s DTC and HDP thermal printers use a dye/sublimation method of printing, which is a unique process that creates various continuous tone colors within one individual dot or pixel of an image. The TPR becomes operational upon its installation in the printer, wherein its activation takes place using the electronic and mechanical systems in the TPR itself. Furthermore, the TPR cartridge has radio frequency sensors to communicate with the thermal printer.
1.4 TPR consists of the following core components viz., supply and take-up spools, thermal transfer ink ribbon, geared and non-geared flanges, a RFID tag (communicates information to the printer) and a cleaning roller. The product does not consist of Ink cartridge and/or Ink nozzle spray but is in a form of a ribbon. It is the ink in the ribbon which melts from the heat in the print head and is transferred on the Card. The purpose of ribbon in TPR is to serve as a medium for printing graphic images and text on an ID plastic card by use of heat. In the thermal printing process, pigmented dye and/or resin is never transferred to the card by means of impact but due to the heat on the printer head.
2.1 The Applicant submits that “Thermal Printer Ribbon” is admittedly a part of Thermal Transfer Printing Machinery and therefore falls for classification under Heading 8443 “Printing machinery used for printing by means of plates, cylinders and other printing components of heading 8442; Other printers, copying machines, and facsimile machines, whether or not combined; parts and accessories thereof”.
2.2 In the case of Honeywell Automation India Ltd. vs. CC, ACC, Mumbai 2018 (359) E.L.T. 402 (Tri. – Mumbai), it has held that Thermal Printer is a printing device capable of being connected to an Automatic Data Processing Machine or a network to print output and thus would be covered under CTH 8443 32 90.
2.3 TPR is part of the Thermal printer since it is integral to the functioning of the Thermal Printer and without TPR the thermal printers cannot function. It has been held that Part is one without which the particular machinery was not operational or could not suitably discharge the function for which it had been designed. Reliance is placed on Sandvik Asia Ltd. vs. Collector of Central Excise, Pune 1997 (93) ELT 475 (Tribunal), CCE, Delhi vs. Insulation Electrical (P) Ltd. 2008 (224) ELT 512 (SC) and Electrosteel Castings Ltd. vs. CCE 1989 (43) ELT 305 (Tribunal).
2.4 Since TPR is a part and accessory to Thermal Transfer Printers i.e. DTC and HDP thermal printers which are covered under CTH 8443 32., the classification would be governed by Section Note 2 of Section 16 as under:
“2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
(a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517, and parts which are suitable for use solely or principally with the goods of heading 8524 are to be classified in heading 8529;
(c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548.”
The relevant extract of Section XVI along with Chapter Heading 8443 is as follows:
Section XVI: Machinery And Mechanical Appliances; Electrical Equipment; Parts Thereof; Sound Recorders And Reproducers, Television Image And Sound Recorders And Reproducers, And Parts And Accessories Of Such Articles
Notes:
1. This Section does not cover:
(a) transmission or conveyor belts or belting, of plastics of Chapter 39, or of vulcanised rubber (heading 4010), or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanised rubber other than hard rubber (heading 4016);
(b) articles of leather or of composition leather (heading 4205) or of furskin (heading 4303), of a kind used in machinery or mechanical appliances or for other technical uses;
(c) bobbins, spools, cops, cones, cores, reels or similar supports, of any material (for example, Chapter 39, 40, 44 or 48 or Section XV);
(d) perforated cards for Jacquard or similar machines (for example, Chapter 39 or 48 or Section XV);
(e) transmission or conveyor belts or belting of textile material (heading 5910) or other articles of textile material for technical uses (heading 5911);
(f) precious or semi-precious stones (natural, synthetic or reconstructed) of headings 7102 to 7104, or articles wholly of such stones of heading 7116 except unmounted worked sapphires and diamonds for styli (heading 8522);
(g) parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39);
(h) drill pipe (heading 7304);
(ij) endless belts of metal wire or strip (Section XV);
(k) articles of Chapter 82 or 83;
(l) articles of Section XVII;
(m) articles of Chapter 90;
(n) clocks, watches or other articles of Chapter 91;
(o) interchangeable tools of heading 8207 or brushes of a kind used as parts of machines (heading 9603); similar interchangeable tools are to be classified according to the constituent material of their working part (for example, in Chapter 40, 42, 43, 45 or 59 or heading 6804 or 6909);
(p) articles of Chapter 95; or
(q) typewriter or similar ribbons, whether or not on spools or in cartridges (classified according to their constituent material, or in heading 9612 if inked or otherwise prepared for giving impressions), or monopods, bipods, tripods and similar articles, of heading 9620.
2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
(a) parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
(b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. *However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517, and parts which are suitable for use solely or principally with the goods of heading 8524 are to be classified in heading 8529.
(c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548.
