2025(01)LCX0137(AAR)

AAR-Mumbai

APPLE INDIA (P) LTD

decided on 27-01-2025

7

Customs Authority for Advance Rulings
New Custom House, Ballard Estate, Mumbai - 400 001
E-MAIL: cus-advrulings.mum@gov.in

F.No. CAAR/CUS/APPL/94/2024 - O/o Commr-CAAR-Mumbai                Date :27.01.2025

Ruling No. & date CAAR/Mum/ARC/201/2024-25 dated 27.01.2025
Issued by Shri Prabhat K. Rameshwaram.
Customs Authority for Advance Rulings, Mumbai
Name and address of the applicant M/s. Apple India Private Limited
13th Floor, Prestige Minsk Square,
Municipal No. 6, Cubbon Road,
Bangalore, Karnataka-560 001.
Email: raghunath1869@apple.com
Concerned Commissionerate The Commissioner of Customs-III(lmport)
Air Cargo Complex, Sahar, Andheri (East).
Mumbai- 400099
Email- import.acc@gov.in

N.B.:

A copy of this order made under sub-section (2) of Section 281 of the Customs Act, 1962 is granted to the concerned free of charge.

Any officer authorised by the Board, by notification or the applicant may file an appeal before the High Court of concerned jurisdiction against any ruling or order passed by the Authority, within 60 days from the date of the communication of such ruling or order.

The Principal Commissioner or Commissioner shall be authorised to file appeal against the advance ruling in terms of sub-section (1) of section 28KA.

The advance ruling pronounced by the Authority under Section 28 - I shall remain valid for three years or till there is a change in law or facts on the basis of which the advance ruling has been pronounced, whichever is earlier.

Where the Authority finds that the advance ruling was obtained by the applicant by fraud or misrepresentation of facts, the same shall be declared void ab initio.

Advance Ruling

    M/s. Apple India Private Limited (having IEC No. 0796001839) 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 22.07.2024 along with enclosures in terms of Section 28H (I) of the Customs Act 1962 (hereinafter referred to as the 'Act' also). The applicant is seeking advance ruling on the issue of classification of the kitted accessories of Apple Vision Pro namely Dual Loop Band. Solo Knit Band and Light Seal under CTI 84733099 of the First Schedule of the Customs Tariff Act. 1975 or otherwise.

2. The Applicant vide their application dated 16.07.2024 has submitted as follows:

2.1 M/s. Apple India Private Limited. India ('Applicant'), is a company having its registered head office located at 13th Floor, Prestige Minsk Square, Municipal No. 6. Cubbon Road. Bengaluru. Karnataka. The Applicant is a company incorporated under the Companies Act. 2013 and is engaged in the business of importing electronic consumer goods under the brand name 'Apple' such as iPhones. iPads. iPods, Mac Book (laptops) and computers for selling the same in India through online sales portal, channel partners and distributors located in India.

2.2 The Applicant in furtherance to its current business is proposing to engage in import of 'Apple Vision Pro' into India. The kitted accessories of Apple Vision Pro namely Dual Loop Band. Solo Knit Band, and Light Seal [kitted accessories] shall be imported by the applicant on standalone basis.

    Overview of Apple Vision Pro

2.3 Apple Vision Pro hereinafter referred to as the 'device', is designed to be worn on the user's head and acts as a spatial portable automatic data processing machine. The devices functions as an independent spatial computing machine but can also be connected to other Apple products such as Apple iPhone ('iPhone'), Apple iPad ('IPad) and Mac Book ("Mac"). For ease of reference an image of the device has been reproduced below:

Image No. 1

 

 

2.4 The device facilitates the users to execute computer programs, browse the internet, compose e-mails, watch videos etc. and navigates through the eyes, hands, voice or virtual keyboard as input devices with a special feature of added dimensions in the vision as it blends the digital content with the physical space. The device acts as a second screen integrated with the physical space and can control the applications of the iPhone. iPad or Mac book that are specially designed for collaborative use between the device and iPhone. iPad or Mac the device has a customized design consisting of cameras and sensors, audio straps, head bands, light seal etc. for proper functioning of the device to enable communication and extend the functionality of the iPhone, iPad and Mac to a user's head.

2.5 Apple Vision Pro and its accessories will be imported by the Applicant for making further sales in India through two supply chain models i.e.,

Import for AOS sales:

2.6 For the sales made through the AOS, the device, i.e., Apple vision pro along with accessories will be imported by the Applicant in a pretty white box as one single kit with a single price and sent to the customers in India. The pretty white box imported under this supply chain model will contain the following accessories including the device, i.e.. Apple Vision Pro as mentioned below:

a. Apple Vision Pro (HMD)

b. Light Seal

c. Light Seal Cushions

d. Solo Knit Band

e. Dual Loop Band

f. Battery

g. Cover

h. 30W USB-C power adaptor

i. USB-C Charge Cable

2.7 The Apple vision pro along with the listed accessories will be imported in a consolidated pretty white box under a one single invoice, where a consolidated/single price is charged for the unit, i.e., the device and the accessories.

Import for sale through brick-and-mortar retail stores

2.8 For sales to be made through the brick-and-mortar retails stores in India, the Applicant will import accessories including the device, i.e., Apple Vision Pro as mentioned below:

a) Apple Vision Pro (HMD)

b) Light Seal Cushions

c) Battery

d) Cover

e) 30W USB-C power adaptor

f) USB-C Charge Cable

2.9 The Apple vision pro along with the listed accessories will be imported in a consolidated pretty white box under a one single invoice, where a consolidated/single price is charged for the unit, i.e.. the device and the accessories. Further, the specified accessories, namely, light seal, solo knit band and dual loop band (together referred to as 'kitted accessories') shall be imported by the Applicant on a standalone basis. The Apple Vision Pro and its accessories (imported in the pretty white box) and the kitted accessories (imported on a standalone basis) shall be assembled at the brick-and-mortar retail store and sold to customers as a single unit (i.e.. Apple Vision Pro) for a consolidated/single price.

Overview of the kitted accessories (Dual Loop Band, Solo Knit Band and Light Seal) which are imported on a standalone basis

2.10 The accessories imported by the Applicant, namely the Dual Loop Band. Solo Knit Band, and Light Seal are specifically designed for use with the Apple Vision Pro. These products are used to enhance the user experience. All of these products find their specific usage with the Apple Vision Pro and are not compatible with any other devices. Product wise details of the kitted accessories imported on a standalone basis by the Applicant have been provided as follows -

Dual Loop Band - The Dual Loop Band is a specialized product for use with Apple Vision Pro which is designed to secure or hold the Apple Vision Pro in place comfortably. The Dual Loop Band features a pair of upper and lower straps. These bands are made up of narrow woven fabric (webbings) and are adjustable in nature by means of metal strap adjusters. These two bands are interconnected with each other through a joint. The Dual Loop Band attaches to the Audio Straps of Apple Vision Pro with a simple and secure mechanism, and release tabs which allow the user to quickly detach it when needed. For ease of reference an image of the Dual Loop Band has been provided as follows -
 

 

 

Solo Knit Band - The Solo Knit Band is a specialized product for use with Apple Vision Pro. The Solo Knit Band is 3D knitted as a single piece to create a unique rib structure that provides cushioning, breathability. and stretch. The Solo Knit Band is made up of knit fabric. It also has an easy-to-reach Fit Dial which allows the users to adjust Apple Vision Pro to the user's head to enable micro adjustments during use. The Solo Knit Band attaches to the Audio Straps of Apple Vision Pro with a simple and secure mechanism, and release tabs which allow the user to quickly detach it when needed. For ease of reference an image of the Solo Knit Band has been provided as follows-

Image No. 3

 

 

Light Seal -Light Seal is another specialized product for use with Apple Vision Pro. This is made up of stainless steel, thermoplastic elastomer, (which is painted with polyurethane), polycarbonate polyester, (Nickel & PVD coated) and is covered with polyester and nylon yarn for an aesthetic defined finish. It also comprises of a narrow woven elastomeric band which is placed onto to the nose of the user. One end of the light seal connects with the Apple Vision Pro body while the other end magnetically attaches with the light seal cushion. As the name suggests, the function of the light seal is to ensure that the light does not leak into the Apple Vision Pro body. For ease of reference an image of the Light Seal has been re-produced as follows-

Image No. 4

 

 

2.11 Thus, in view of the above overview, the aforementioned products augment the Apple Vision Pro's user experience by improving the overall usability of products.

Applicant's interpretation of Law/Facts

3.1 The Applicant submitted that the kitted accessories namely Dual Loop Band, Solo Knit Band, and Light Seal shall be imported on a standalone basis. The classification of each of the kitted accessory are analysed as under:

Analysis of classification of Dual Loop Band under CTH 8473

3.2 In the present case, since the Dual Loop Band is to be used with Apple Vision Pro which is essentially an Automatic Data Processing Machine and is classifiable under CTH 8471. reference must be made to CTH 8473 which covers "Parts and Accessories" of products covered under CTH 8470, CTH 8471 or CTH 8472.

3.3 Here it becomes pertinent to discuss the scope CTH 8473 which inter alia covers "parts and accessories" which are solely and principally used with products covered under CTH 8471.

3.4 The term "parts" or "accessories" has not been defined in the Customs Tariff, therefore, reliance may be placed on various judicial interpretation of the aforementioned terms. The term "parts" and "accessories" has been explained by a Supreme Court ruling in the case of CCE, Delhi Vs. Insulation Electrical (P) Ltd., [2008 (224) E.L.T. 512 (S.C.)]. In this case, the Supreme Court while relying on various other Supreme Court rulings has defined the term "parts" as an "essential component of the whole without which the whole cannot function". While the term "accessory" was defined to be something which is "supplementary or subordinate in nature and need not be essential for actual functioning of the product".

3.5 Further, in the case of Vodafone Mobile Services Limited Vs. Commissioner of S.T., Delhi, [2019 (27) G.S.T.L. 481 (Del.)], the term "accessory" has been defined as an "article or device that adds to the convenience or effectiveness of but not essential to the main machinery".

3.6 Hence, in view of the above definitions, it is understood that a "part" is one without which the complete machine cannot function whereas "accessory" is one which adds to the convenience and effectiveness of the machine, but it does not assist in functioning of the machine. Therefore, now it becomes pertinent to discuss whether the Dual Loop Band is covered within the definition of "part" or "accessory" of Apple Vision Pro as discussed above.

3.7 Further, in order to be classified under CTH 8473 a part or accessory must be used "solely" or "principally" with the products covered under CTH 8470 to CTH 8472. Reliance in this regard is placed on HSN Explanatory Notes to CTH 8473 which states as follows-

"Subject to general provisions regarding classification of parts (see the General Explanatory Note to Section Note XVI, this heading covers parts and accessories suitable for use solely or principally with the machines of heading 84.70 to 84.72.

The accessories covered by this heading are interchangeable parts or devices designed to adapt a machine for a particular operation, or to perform a particular service relative to the main function of the machine, or to increase its range of operations"

3.8 Upon perusal of the above, it is clear that only those parts and accessories which are suitable for use solely or principally with the products under products covered under CTH 8470 to CTH 8472 are to be classified under CTH 8473. Further, the term "accessory" includes those products which perform a particular function to increase its range of operations or perform a particular service relative to the main function of the products.

3.9 In the present case, the Dual Loop Band is a specialized product for use with Apple Vision Pro. It is designed to secure or hold the Apple Vision Pro in place comfortably. The Dual Loop Band features a pair of upper and lower straps which are interconnected with each other through a joint. The Dual Loop Band attaches to the Audio Straps of Apple Vision Pro with a simple and secure mechanism, and release tabs which allow the user to quickly detach it when needed.

3.10 Based on the preceding description of the Dual Loop Band, it is understood that the Dual Loop Band is used to enhance the functionality and application of the Apple Vision Pro and is solely used with Apple Vision Pro. By securely fastening the Apple Vision Pro to the user's head, the Dual Loop Band significantly enhances the user experience by improving the overall usability of the product.

3.11 Further, the Dual Loop Band can only be used along with Apple Vision Pro and is not compatible with any other electronic device. To support this fact, reference may be made to the Apple online store for Apple Vision Pro wherein in the dropdown option for compatibility of Dual Loop Band it has been stated that it is compatible with Apple Vision Pro and no other device has been mentioned therein.

3.12 Thus, it can be said that the Dual Loop Band adds to the convenience and effectiveness of the Apple Vision Pro. Therefore, it fulfils the definition of the term "accessory" as defined earlier. Further, as the Dual Loop Band is used solely and principally with the Apple Vision Pro. thus in terms of HSN Explanatory Notes to CTH 8473, it also fulfils the requirement of an accessory to be classified under CTH 8473.

3.13 Hence, in view of the above, the Applicant submits that the Dual Loop Band is an "accessory" of Apple Vision Pro and is therefore covered under CTH 8473 in terms of GIR 1 read with HSN Explanatory Notes to CTH 8473. The relevant entry at single-dash level entry 8473 30 is "Parts and accessories of the machines of heading 8471" which is further sub-divided.

3.14 Since in the present case, the Dual Loop Band is not covered under any of the specific heading under at the eight-digit level, therefore it will be classified under the residuary entry of CTI 8473 30 99 which covers "Other" parts and accessory of products covered under CTH 8473, in terms of GIR 1 read with GIR 6.

Analysis of classification of Solo Knit Band under CTH 8473

3.15 In the present case, since the Solo Knit Band is to be used with Apple Vision Pro which is essentially an Automatic Data Processing Machine and is classifiable under CTH 8471, reference must be made to CTH 8473 which covers "Parts and Accessories" of products covered under CTH 8470 to CTH 8472.

3.16 The Solo Knit Band is a specialized product for use with Apple Vision Pro and is used solely with Apple Vision Pro. It is designed to secure or hold the Apple Vision Pro in place comfortably. The Solo Knit Band is 3D knitted headband which provides cushioning, breathability, and stretch when the same is worn by the user. It also has an easy-to-reach Fit Dial which allows the users to adjust Apple Vision Pro to the user's head to enable micro adjustments during use. The Solo Knit Band attaches to the Audio Straps of Apple Vision Pro with a simple and secure mechanism, and release tabs which allow the user to quickly detach it when needed.

3.17 Based on the preceding description of the Solo Kinit Band, it is understood that the Solo Knit Band is used to enhance the functionality and application of the Apple Vision Pro. Similar to the Dual Loop Band, the Solo Knit Band also helps in fastening of Apple Vision Pro to the user's head, thereby enhancing the user experience by improving the overall usability of the product

3.18 Here it is also pertinent to mention that the Solo Knit Band can only be used along with Apple Vision Pro and is not compatible with any other electronic device. In order to support this fact, reference may be made to Apple online store wherein in the dropdown option for compatibility of Solo Knit Band it has been stated that it is compatible with Apple Vision Pro and no other device has been mentioned therein.

3.19 Thus, it can be said that the Solo Knit Band adds to the convenience and effectiveness of the Apple Vision Pro. Therefore, it fulfils the definition of the term "accessory" as defined earlier. Further, as the Solo Knit Band is used solely and principally with the Apple Vision Pro, thus it also fulfils the requirement of an accessory to be classified under CTH 8473. in terms of HSN Explanatory Notes to CTH 8473.

3.20 Hence, in view of the above, the Applicant submits that the Solo Knit Band is in the nature of an "accessory" of Apple Vision Pro and is therefore covered under CTH 8473. in terms of GIR I read with HSN Explanatory Notes to CTH 8473. The relevant entry at single-dash level entry 8473 30 is "Parts and accessories of the machines of heading 8471" which is further sub-divided.

3.21 Since in the present case, the Solo Knit Band is not covered under any of the specific heading under at the eight-digit level, therefore it will be classified under the residuary entry of CTI 8473 30 99 which covers "Other" parts and accessory of products covered under CTH 8473. in terms of GIR I read with GIR 6.

Analysis of classification of Light Seal under CTH 8473

3.22 In the present case, since the Light Seal is to be used with Apple Vision Pro which is essentially an Automatic Data Processing Machine and is classifiable under CTH 8471. reference must be made to CTH 8473 which covers "Parts and Accessories" of products covered under CTH 8470 to CTH 8472.

3.23 As discussed in the aforementioned paragraphs, an "accessory" is one which adds to the convenience and effectiveness of the machine, but it does not assist in functioning of the machine. In the present case, the Light Seal is a specialized product for use with Apple Vision Pro. The Light Seal is tailor made for use with Apple Vision Pro. It is made up of stainless steel, thermoplastic elastomer (which is painted with polyurethane). polycarbonate polyester. (Nickel & PVD coated) and is covered with polyester and nylon yarn for an aesthetic defined finish. It also comprises of a narrow woven elastomeric band which is placed for support of the nose of the user. The function of the light seal is to ensure that the light does not leak into the Apple Vision Pro body. One end of the light seal connects with the Apple Vision Pro body while the other end magnetically attaches with the light seal cushion. Therefore, it can be said that the Light Seal enhances the functionality and application of the Apple Vision Pro by preventing stray light to pass into the Vision Pro lens.

3.24 Further, the Light Seal can solely be used along with Apple Vision Pro and is not compatible with any other electronic device. In order to support this fact, reference may be made to Apple online store wherein in the dropdown option for compatibility of Light Seal it has been stated that it is compatible with Apple Vision Pro and no other device has been mentioned therein.

3.25 Thus, it can be said that the Light Seal adds to the convenience and effectiveness of the Apple Vision Pro. Therefore, it fulfils the definition of the term "accessory" as defined earlier. Further, as the Light Seal is used solely and principally with the Apple Vision Pro. it also fulfils the requirement of an accessory to be classified under CTH 8473. in terms of HSN Explanatory Notes to CTH 8473

3.26 As stated above, the Light Seal is a tailor-made product which is designed specifically for use with Apple Vision Pro. It is made up of stainless stee, plastic cover(which is painted with polyurethane), polycarbonate polyester, (Nickel & PVD coated) and is covered with polyester and nylon yarn for an aesthetic defined finish. It also comprises of a narrow woven elastomeric band which is placed for support of the nose of the user. Due to its composite nature and the absence of any single material that predominantly defines its essential character, the Light Seal does not fall under a distinct classification elsewhere in the nomenclature.

3.27 Hence, in view of the above, the Applicant submits that the Light Seal is in the nature of an "accessory" of Apple Vision Pro and is therefore covered under CTH 8473, in terms of GIR 1 read with HSN Explanatory Notes to CTH 8473. The relevant entry at single-dash level entry 8473 30 is "Parts and accessories of the machines of heading 8471" which is further sub-divided.

3.28 Since in the present case, the Light Seal is not covered under any of the specific heading under at the eight-digit level, therefore it will be classified under the residuary entry of CTI 8473 30 99 which covers "Other" parts and accessory of products covered under CTH 8473, in terms of GIR 1 read with GIR 6.

3.29 The Applicant placed reliance on U.S. Cross Ruling No. NY D82874 dated 06.10.1998 wherein classification of mouse pad and wrist wrest made of poly-urethane with a covering material of Lycra, was decided under CTI 8473.30.5000. In the present case, both, the Dual Loop Band and the Solo Knit Band, are made up of fabric material, one of woven fabric and other of knitted fabric while the Light Seal is made up of composite materials. Therefore, it is submitted that the products under consideration are similar to that covered under the aforementioned cross ruling.

3.30 Further, as discussed earlier, each of these kitted accessories are used solely and principally with Apple Vision Pro which is in the nature of an Automatic Data Processing Machine. Hence, the Kitted Accessories, i.e., Dual Loop Band, Solo Knit Band and Light Seal are also classifiable under CTH 8473.

3.31 Thus, to summarize the aforementioned discussion, the kitted accessories i.e., Dual Loop Band, Solo Knit Band and Light Seal merits classification under CTI 8473 30 99 which reads as "Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472- Parts and accessories of the machines of heading 8471----Other----Other.

Port of Import and reply from concerned jurisdictional Commissionerate

4.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e. kitted accessories of Apple Vision Pro namely Dual Loop Band, Solo Knit Band and Light Seal at the jurisdiction of Office of the Commissioner of Customs. Air Cargo, Mumbai. The application was forwarded to the Office of the Commissioner of Customs, Air Cargo, Mumbai for their comments on 31.07.2024 & 23.10.2024.

The concerned Commissionerate vide their letter dated 24.10.2024 has submitted as follows:

Details of Hearing

5.1 A hearing was held on 21.10.2024 at 03.00 PM. Shri. Gautam Khattar, Shri Anurag Sehgal and Shri Jimit Gandhi, authorized representative on behalf of the applicant appeared for the hearing and reiterated the contention submitted with the application. They submitted that the subject goods i.e. kitted accessories of Apple Vision Pro namely Dual Loop Band. Solo Knit Band and Light Seal will merit classification under CTI 84733099. They contended that as per Note 3(b) of GRI, the essential characteristics of the accessories are of part of the goods under CTI 84713090 as these are used to increase comfort and user experience. They submitted the index of compilation of legal provisions and case laws

    Nobody appeared on behalf of the Department for hearing.

Discussion and findings

6.1 I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made by the applicant during the personal hearing. I have also gone through the response/comments received from the concerned jurisdictional commissionerate i.e. Air Cargo, Mumbai. I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework.

6.2 At the outset, I find that the issue raised in the question in the Form CAAR-I is squarely covered under Section 28H(2) of the Customs Act, 1962, being a matter related to classification of goods under the provisions of this Act.

6.3 Before deciding the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act. 1975. Chapter/ Section notes along with HSN explanatory notes. As per Rule 1 of GRI, the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes.

6.3.1 The Applicant submitted that kitted accessories namely Dual Loop Band. Solo Knit Band, and Light Seal are specifically designed for use with the Apple Vision Pro which is in the nature of an Automatic Data Processing Machine and classifiable under CTH 8471 (Automatic data-processing machines and units thereof, magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included). All of these products find their specific usage with the Apple Vision Pro and are not compatible with any other devices. The kitted accessories namely Dual Loop Band. Solo Knit Band, and Light Seal are in the nature of an "accessory" of Apple Vision Pro and is therefore covered under CTI 8473 30 99 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472- Parts and accessories of the machines of heading 8471----Other----Other), in terms of GIR 1 read with HSN Explanatory Notes to CTH 8473. Before deciding the classification of the kitted accessories namely Dual Loop Band. Solo Knit Band, and Light Seal, there is a need to examine the classification of the Apple Vision Pro as automatic data processing machine under CTH 8471 as claimed by the applicant.

6.3.2 From the submissions of the applicant, and the information available on the webpage of M/s. Apple, it appears that the Apple Vision Pro. have the following features, i.e.. a pair of micro-OLED displays deliver more pixels than a 4K TV, VisionOS system 8-core CPU with 4 performance cores and 4 efficiency cores, M2 Chip, Rl Processor for real-time sensor input processing, Wi-Fi connectivity, Bluetooth connectivity, 3D camera, 256 GB, 512 GB & 1 TB internal storage, real time sensor, among others. These devices weigh 600 to 650 grams and runs on rechargeable batteries having a battery life of 2 hours for general use. These devices can process data, execute programmes, and connect to internet via a wireless network, send/receive e-mails, upload/download files, download software applications, conduct video/VoIP {voice over Internet Protocol) communication, support game controller, among others. The device also supports the following input accessories, i.e., Keyboards, Trackpad, Game Controller and Bluetooth Mouse support for VisionOS 2. The input method for the device is hands, eyes and voice commands instead of a traditional keyboard.

6.3.3 In order to merit classification under heading 84.71, it is clear, that these devices need to satisfy the requirements of the Note 6(A) to Chapter 84. For the sake of clarity, the Chapter Note 6 to Chapter 84 is reproduced below:

"(A) For the purposes of heading 8471, the expression 'automatic data- processing machines' means machines, capable of

(1) Storing the processing program or programs and at least the data immediately necessary for the execution of the program;

(2) Being freely programmed in accordance with the requirements of the user;

(3) Performing arithmetical computations specified by the user; and

(4) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.

(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units

(C) Subject to paragraphs (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 connect able 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.

Separately presented units of an automatic data processing machine are to be classified in heading 8471.

However, keyboards, X-Y co-ordinate input devices and disk storage units which satisfy the conditions of (ii) and (Hi) above, are in all cases to be classified as units of heading 8471.

(D) Heading 8471 does not cover the following when presented separately, even if they meet all of the conditions set forth in paragraph (C) :

(i) printers, copying machines, facsimile machines, whether or not combined;

(ii) apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a Mired or wireless network (such as a local or wide area network/;

(iii) loudspeakers and microphones;

(iv) television cameras, digital cameras and video camera recorders;

(v) monitors and projectors, not incorporating television reception apparatus.

(E) 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. "

6.3.4 Therefore, there is a need to examine whether the features and specifications of Apple Vision Pro meet the criteria as laid down in the relevant Chapter Note reproduced above. For any device to be held as an ADP and classifiable under sub-heading 847130. four essential conditions as mentioned above in Note 6(A). are required to be satisfied. Let's break down and explain each of the four conditions one by one. with clarity and detail in the context of this device:

a). Storing the processing program or programs and at least the data immediately necessary for the execution of the program: The Apple Vision Pro which integrates augmented reality (AR) and virtual reality (VR) technologies, is designed to store and execute complex processing programs for its AR and VR applications. The device comes with a storage capacity of 256 GB. 512 GB or 1 TB. an Apple M2 Chip with 8-core CPU. 10-core GPU, 16-core Neural Engine and an Apple Rl co-processor. It runs VisonOS. a sophisticated operating system that facilitates the storage and execution of programs. The programs stored within the device include those that process AR/VR content, spatial data, user interaction, etc. The device also stores data necessary for its functions, such as user preferences, environmental mapping data, sensor data, and spatial mapping data, which is essential for real-time AR experiences. This device has storage capability and can store programs which can be changed from job to job. They process data in coded form. The Apple Vision Pro meets this criterion because it stores both the processing programs and the necessary data for their execution.

b). Being freely programmed in accordance with the requirements of the user: This device is highly customizable and can be programmed to meet a wide range of user needs. The Apple Vision Pro supports the installation and execution of applications (such as YouTube. Prime. Google Chrome, etc.). allowing users to tailor the device's functionality according to their specific requirements

    The term "freely programmable' is not explicitly defined under the Customs Tariff but the reliance is placed on the decision of 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] wherein the Hon'ble CESTAT while deciding the classification of Interactive Display System as an adjustatic data processing machine under CTH 8471, observed that for complying with the requirement for the goods being 'freely programmable', the goods should be capable of downloading and installing new programmes in accordance with their needs and usage. The relevant para of the judgement is reproduced as under:

19. The goods come With a pre-installed operating system, namely, Android 7.0. The said Android version is a customized operating system for these IFP. Further, the goods also have an OPS slot. With the use of the OPS Slot, additional hardware can be connected to the goods and the OPS Slot can also be used for installing other operating software such as Windows, etc. on the goods. Thus, the goods are machines on which the user is able to load and execute a program. In other words, the goods are capable of executing any application/program which is stored on its memory. A user can, with the use of either Android or other operating systems, download and install new programmes in accordance with their needs and usage. Thus, goods are machines which can be freely programmed in accordance with the need of the user and hence, satisfy condition (ii) of Chapter Note 5(A) to Chapter 84''.

    I also draw attention to Note 5 to Chapter 85 which stipulates 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". From the aforesaid Note, it is clear that for a device to qualify as an automatic data processing machine, it should be capable of installing and running applications based on the user's requirements.

    In the case of the Apple Vision Pro, the user, through the use of VisionOS, can download and install new programs according to their specific needs and usage. This demonstrates that the device functions as a machine that can be freely programmed in accordance with the user's requirements. Therefore, the Apple Vision Pro satisfies this condition, as it supports free programming for a wide range of uses and functions.

c). Performing arithmetical computations specified by the user: The device performs significant arithmetical computations as part of its operation. These computations include tasks such as spatial data processing. 3D rendering, tracking user movement, image recognition, and real-time environmental mapping. It processes complex visual and spatial data to create immersive AR and VR experiences. In its usage scenarios, the device needs to perform tasks such as calculating distances, angles, and other spatial and geometric compulations to deliver a responsive and Interactive AR/VR environment. The Apple Vision Pro certainly qualifies for this condition as it performs complex arithmetical computations as part of its core functionalities.

d). Executing, without human intervention, a processing program which requires them to modify their execution by logical decision during the processing run: This device is designed to execute programs that adapt dynamically to the user's actions and the environment. It processes input from a variety of sensors (e.g., eye-tracking, hand gestures, spatial sensors) and uses that input to adjust its operations in real time. For example, it can change the AR content based on the user's gaze or adjust the virtual environment based on the user's location and movement. A user can give a command and the same would be executed without any further intervention of the user. The CPU along with the operating system executes the command so given by the user by taking logical decisions during the processing run. This condition is fulfilled because the device doesn't require human intervention during its operation but makes logical decisions and adjustments to the program's execution in real time, based on its sensors and the environment.

6.3.5 From the above, it can be concluded that the Apple Vision Pro is equipped with the necessary hardware, including sufficient RAM and storage, to support the storage and execution of its operating system and software programs, enabling effective data processing. The software loaded onto the device is freely programmable, allowing users to customize the functionality according to their specific requirements. The device is capable of performing the arithmetical computations as specified by the user, and its processing program enables it to modify its execution dynamically based on logical decisions during the processing run without human intervention. In light of these capabilities, the Apple Vision Pro meets all the criteria outlined in Note 6(A) of Chapter 84, thereby qualifying it as a device covered by the definition of automatic data processing machine (ADPM).

6.3.6 Further. HSN Explanatory Notes to CTH 8471 further elucidates on what constitutes an Automatic Data Processing Machine (ADPM). The relevant portion of the Explanatory Notes are extracted below:

"(I) AUTOMATIC DATA PROCESSING MACHINES AND UNITS THEREOF

Data processing is the handling of information of all kinds, in pre-established logical sequences and for a specific purpose or purposes.

Automatic data processing machines are machines which, by logically interrelated operations performed in accordance with pre-established instructions (program), furnish data which can be used as such or. in some cases, serve in turn as data for other data processing operations.

This heading covers data processing machines in which the logical sequences of the operations can be changed from one job to another, and in which the operation can be automatic, that is to say with no manual intervention for the duration of the task. These machines mostly use electronic signals but may also use other technologies. They may be self-contained, all the elements required for data processing being combined in the same housing, or they may be in the form of systems consisting of a variable number of separate units.

This heading also covers separately presented constituent units of automatic data processing systems described above.

However, the heading excludes machines, instruments or apparatus incorporating or working in conjunction with an automatic data processing machine and performing a specific function. Such machines, instruments or apparatus are classified in the headings appropriate to their respective functions or. failing that, in residual headings (See Part (E) of the General Explanatory Note to this Chapter).

(A) AUTOMATIC DATA PROCESSING MACHINES

The automatic data processing machines of this heading must be capable of fulfilling conditions laid down in Note 6 (A) to this Chapter. That is to say they must be capable of:

(1) Storing the processing program or programs and at least the data immediately necessary for the execution of the program;

(2) Being freely programmed in accordance with the requirements of the user,

(3) Performing arithmetical computations specified by the user; and

(4) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.

Thus, machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, are excluded even user may be choose a number of such fixed programs.

These machines have storage capability and also stored programs which can be changed from job to job.

Automatic data processing machines process data in coded form. A code consists of a finite set of characters (binary code, standard six bit ISO code, etc.).

The data input is usually automatic, by the use of data media such as magnetic tapes, or by direct reading of original documents, etc. There may also be arrangements for manual input by means of keyboards or the input may be furnished directly by certain instruments (e.g.. measuring instruments). The input data are converted by the input units into signals which can be used by the machine, and stored in the storage units.

Part of the data and program or programs may be temporarily stored in auxiliary storage units such as those using magnetic discs, magnetic tapes, etc. But these automatic data processing machines must have a main storage capability which is directly accessible for the execution of a particular program and which has a capacity at least sufficient to store those parts of the processing and translating programs and the data immediately necessary for the current processing run.

Automatic data processing machines may comprise in the same housing, the central processing unit, an input unit (e.g., a keyboard or a scanner) and an output unit (e.g., a visual display unit), or hay consist of a number of interconnected separate units. In the latter case, the units form a ''system" when it comprises at least the central processing unit, an input unit and an output unit (see Subheading Note 2 to this Chapter). The interconnections may be made by wired or wireless means. A complete automatic data processing system must comprise, at least:

(1) A central processing unit which generally incorporates the main storage, the arithmetical and logical elements and the control elements; in some cases, however, these elements may be in the form of separate units.

(2) An input unit which receives input data and converts them into signals which can be processed by the machine.

(3) An output unit which converts the signals provided by the machine into an intelligible for (printed text, graphs, displays, etc.) or into coded data for further use (processing, control, etc.).

Two of these units (input and output units, for example) may be combined in one single unit. "

6.3.7 The features and specification of the aforesaid goods, also clearly show that the Apple Vision Pro consist of a powerful processor for processing the data and programs, a LED Screen, which serves as the output source, and a virtual keyboard, which acts as the source of input. Therefore, in light of the above Chapter Note and Explanatory Notes, the Apple Vision Pro satisfy all the conditions stipulated in Chapter Note 6(A) to Chapter 84 and Explanatory Notes to qualify as an automatic data processing machine (ADPM) covered under CTH 8471.

6.3.8 The aforementioned goods meet all the conditions outlined in Chapter Note 6(A) to Chapter 84 and the Explanatory Notes, however, the Apple Vision Pro being an Automatic Data Processing Machine, alone would not entitle it being classifiable under CTH 8471, rather for it to fall under the said CTH 8471, it must not be specified elsewhere or included in the Customs Tariff. Thus, the marketing of the goods by the applicant as 'Spatial Computer* in itself is not sufficient to conclusive hold the classification of the impugned goods under CTH 8471. To conclusive arrive at a decision regarding the eligibility or otherwise of the claimed classification, it is of paramount importance to ascertain whether the subject goods is a machine performing any principal function other than data processing.

6.3.9 Thus, irrespective of the fact that the product i.e. Apple Vision Pro marketed by the applicant as Spatial Computer, would merit classification under Heading 8471 only if the conditions as stipulated and discussed supra are adhered to. The rules of interpretation for classification. Section Notes and Chapter Notes as specified under Customs Tariff Act 1975 are applicable for classification of the impugned goods. It would not be out of place to mention here that Chapter Note 6 (E) of Chapter 84 stipulates that machine performing a specific function other than data processing merits classification in appropriate headings /residual headings.

    Thus, any primary functionality other than data processing would disentitle the Apple Vision Pro from getting classified under heading 8471 ibid.

6.3.10 From the submissions of the applicant, and the information available on the webpage of M/s. Apple, it appears that the Apple Vision Pro can process data, execute programmes, and connect to internet via a wireless network, send/receive e-mails, upload/download files, download software applications, browse the internet, watch videos, conduct video/VoIP {voice over Internet Protocol) communication, allow to execute programs and tasks based on voice commands through Siri, Apple's voice assistant, play games in an innovative and interactive way and others.

6.3.11 The Apple Vision Pro can perform a wide range of tasks and functions across various domains, seamlessly integrating multiple technologies into one platform. It combines elements of augmented reality (AR). virtual reality (VR). and mixed reality (MR), enabling users to interact with digital content in immersive ways. It also has the ability to transmit and receive data, whether for real-time communication, content sharing, or interaction with other smart devices in the ecosystem, communication (via voice or video calls). With its versatile capabilities, the Apple Vision Pro acts as a multifunctional device that combines entertainment, communication, immersive experience, computing, transmission of the data, gaming and productivity. Thus, this device is capable of performing multiple functions, including automatic data processing.

Analysis of alternate classification under CTH 8517

6.3.12 It is also observed that the communication is function of the product i.e. Apple Vision Pro as the device is able to do voice or video calls on wireless network. The communication devices are classifiable under CTH 8517. Therefore, in respect of possible alternate heading 8517. there is a need to examine the features of these devices in the context of Chapter Note 6 (F) of Chapter 84.Heading 8517 covers "telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 84.43, 85.25, 85.27 or 85.28". As the devices also have communication capabilities, including voice or video calls on wireless network, classification under heading 8517 needs to be examined.

    Chapter Note 6 (E) of Chapter 84 stipulates that machine performing a specific function other than data processing merits classification in appropriate headings /residual headings.

In the instant case, these devices have computing and communication capabilities. However, for the product under consideration, automatic data processing appears to be the main function, while other functionalities of said machine are not different from auxiliary functions that could be seen on any computer, such as desktop or laptop computers.

    In Circular No. 20/2013- Cus. dated 14.05.2013, clarification has been given by the Board regarding the classification of "tablet computers" under heading 8471 stating that. "... The mobile phone calling function could be provided by the products only as a supplementary function because it could not be activated without running an operating system of the devices.... These devices are not intended to be a substitute for a mobile phone to make voice calls, but, according to its main technical features is designed as a substitute for laptops. 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". Thus, as per the said circular, tablet computers are classifiable under heading 8471 and not under heading 8517 despite the fact that the product is having cellular connection functionality, considering its principal function as automatic data processing.

    Similarly, in this case, the principal function of the Apple Vision Pro is automatic data processing and not communication. Therefore, the device does not appear to merit classification under heading 8517, as this heading primarily covers communication devices.

Analysis of alternate classification under CTH 9504

6.3.13 As per submission of the applicant and information available on the website of Apple, it is observed that the Apple Vision Pro can be used to play games. The Heading 9504 covers "Video game consoles and machines, articles for funfair, table or parlour games, including pint able, billiards, special tables for casino games and automatic bowling alley equipment". Therefore, in respect of possible alternate heading 9504, there is a need to examine the features of this device in the context of Chapter Note 6 (E) of Chapter 84. As the device also has gaming functionality, classification under heading 9504 needs to be examined.

    HSN Explanatory Note 2 to Chapter Heading 9504 stipulates that, "video games and machines whose objective, characteristic and principal function are such that they are intended for entertainment purposes (game-playing) remain classified in this heading, whether or not they fulfil the conditions of Note 6(A) to Chapter 84 regarding automatic data processing machines."

    Further, it is necessary to examine the words "video game consoles and machines" in the proper perspective i.e., in terms of Subheading Note 1 to Chapter 95 of the Customs Tariff Act, wherein the terms "Video game consoles" and "Video game machines" have been categorically explained as under: -

"(a) Video game consoles from which the image is reproduced on a television receiver, a monitor or other external screen or surface; or

(b) Video ga tie machines having a self-contained video screen, whether or not portable. "

    From the above, it is amply clear that such 'video game consoles' and 'video game machines' alone fall under pie purview of HSN Explanatory Note (2), whether or not they satisfy the conditions of Note 6(A) to Chapter 84. Thus, primarily, to fall within the ambit of the above Note, the goods necessarily have to be such video game consoles/machines as defined above. Further, Chapter Heading 19504 includes machines besides video game consoles, which can be automatic data processing machines.

    However, as per technical specification of the product, the impugned goods are neither 'video game consoles' nor 'video game machines', but are an entirely different product which, though have gaming capabilities, are also having a wide array of functionalities such as internet surfing, multimedia playing, watching videos, computing, voice calling etc., and can be put to multiple uses.

    Considering the above information and details, the impugned goods satisfy the condition of Note 6(A) to Chapter 84 but does not fall under the purview of the Explanatory Note 2 to Chapter Heading 9504 as game consoles/game machine as they are not principally designed for entertainment purposes including playing games.

    Further, I also relied upon on the case of M/s. Asus India Private Limited vs. Commissioner of Customs, ACQ Chennaif (2023) 11 Centax 85 (Tri.-Mad)], wherein the Hon'ble CESTAT. Chennai held that the goods described as 'Computer System Desktop* has all the characteristics of personal desktop computer, though have gaining capabilities, also have computing capabilities, internet suffering, multimedia playing, editing, word processing, etc. and satisfy all the condition set forth in Note 6(A) to Chapter 84. is classifiable under CTH 8471 as an automatic data processing machine.

    Applying the above rules and rationale of the above said judgements, the Apple Vision Fro does not appear to classifiable under CTH 9504 as their objective, character and principal feature is not playing games only.

6.3.14 The Applicant submitted that the device facilitates the users to execute computer programs, browse the internet, compose emails, watch videos, play games and perform an array of other tasks. To facilitate the transmission of the information on a larger surface in the physical space, glances are used to quickly and efficiently navigate through the information through their eyes, hands, voice, or virtual keyboard as input devices with a special feature of added dimensions in the vision as it blends the digital content with the physical space.

    As per technical features and specification, the device contains an operating system and same can perform logically operations with the pre-established set of instructions without human intervention. The specifications, i.e.. powerful processor and operating system for processing the data and programs and sufficient storage space for storing of programs and data also prove that these devices have all the features and functions of an automatic data processing. The subject device contains input unit, processing unit and output unit.

    On careful consideration of all parameters of the case. I find that the Apple Vision Pro are capable of performing plethora of functions. It can be seen from the technical features of the subject goods that it is used predominantly as an automatic data processing (ADP) machine. In fact, communication and gaming are only auxiliary functions of the goods but same cannot construed to be its principal function.

    Thus, the Apple Vision Pro having specific function of automatic data processing, falls within the ambit of Chapter Heading 8471 as per Chapter Note 6(A) to Chapter 84 and Explanatory Notes.

6.3.15 The CBEC vide Circular No. 20/2013-Customs dated 14.05.2013 has clarified that the tablet computer has same functionality as a laptop as the same can process data, execute programs and connect to the Internet via a wireless network in order to. for example, exchange and manage e-mails, exchange or download files, download software applications, conduct video or VoIP communication, apart from being connected to a cellular network to make calls. In other words, automatic data processing is the main functionality, while other features are auxiliary in nature. Therefore, the tablet computer shall be classifiable under HSN 8471 30, which is the same classification used for laptops.

    In the present case, the primary functionality of the Apple Vision Pro is similar to that of a tablet or laptop, as it performs automatic data processing. Although it offers additional features like immersive AR/VR experiences, these are auxiliary features that do not change the device's core purpose as a computing device. Based on this reasoning, and in line with the CBEC Circular, the Apple Vision Pro can be considered similar to tablet computers and laptops for classification purposes

6.3.16 I have also relied on the Advance Tariff Ruling dated 15.08.2024 (Ruling reference no. 600010679) issued to M/s. Apple Distribution International Limited, wherein the same product i.e. Apple Vision Pro, was classified under CTH 8471.30.000 as an ADPM, by the Irish Revenue Commissioners based on the General Rules of Interpretation (GIR) and Note 6(A) of Chapter 84.

    The classification of the Apple Vision Pro is further supported by the Binding Tariff Information (BTI) decision dated 11th June 2024 (reference no. IEBTIIENEN004-2024-BTI201) issued by the Classification Unit (BTI) of the Revenue Commissioners, Ireland, confirming the classification of the device under CTH 8471.30.0000 for Apple Distribution International Ltd.

    It is important to note that these rulings were issued by authorities outside India, however, it serves as a useful reference point for aligning with international classification practices and I am referring to them as a guide for determining a consistent and uniform classification globally.

6.3.17 Apple Vision Pro uses advanced 3D cameras and sensors that work in perfect sync to offer the best Spatial Computing experience. The laminated glasses in the front work as the optimal surface through which these cameras and sensors see the world around the user. This Apple headset works on visionOS - a specially designed operating system that control the entire virtual ecosystem using eye expressions, hand gestures, and voice commands. The user can view the available apps through the glasses, lay over wall or the surroundings that user are in, and operate the apps using voice commands and movements of hands and eyes.

6.3.18 As per information available on the website of LTIMindtree Limited, an Indian multinational information technology services and consulting company and subsidiary of Larsen & Toubro< https://www.tlimindtree.com/wp-content/uploads/2023/10/Spatial-computing-A-window-into-the-future-of interactions.pdf?pdf=download%20%E2%80%93%202023>Spatial-computing describes the seamless integration of digital content and the physical world, creating an immersive and interactive environment. This technology uses a combination of Augmented Reality (AR), Virtual Reality (VR), Mixed Reality (MR), and other technologies to create a spatial computing platform. Spatial computing enables the users to interact with digital content more naturally and intuitively, using gestures, voice commands, and other input forms. Spatial computing uses a 3D environment as the primary computing platform rather than the traditional 2D Graphical User Interface (GUI). This environment can be a virtual or augmented reality, where the user can interact with digital objects and information in a 3D space. It allows for natural and intuitive interaction, such as gestures, body language, and spatial awareness. These interfaces are designed to be human-like and can naturally interact with the world around them instead of using a mouse and a keyboard.

    As per the research paper on "Spatial Computing: Concept. Applications. Challenges and Future Directions'* cited as arXiv:2402.079l2 [cs.HC] and submitted on 30.01.2024, it is submitted that over the years. User Interfaces (Uls) have seen constant development and improvement. Command line interfaces, which have been around since the 1960s, require users to type in commands in order to interact with computers. In the 1980s. graphical user interfaces were developed to make computers more user-friendly. These interfaces used windows and icons to represent commands and data. In the 1990s. as the internet grew in popularity, web-based interfaces replaced traditional methods. Then, in the middle of the 2000s. smartphones and tablets appeared, leading to the era of touch-based interfaces and radically changing the ways in which we engage with electronic gadgets. The road map of Uls development over the years is depicted as below:

 

 

    The advancement of modern technology like AI. Internet of Things (loT). Augmented Reality (AR). Virtual Reality (VR). and Mixed Reality (MR) is now leading us to a new generation of Uls. These modern technologies are blurring the distinction between real and virtual environments. This seamless and highly efficient blending of the physical environment with the digital realm creates endless possibilities for highly immersive, interactive experiences. Spatial computing is one such technology that encompasses many enabling technologies, including the IoT, ambient computing, AR. VR. and AI. The term spatial computing was first coined by Simon Greenwold. an MIT researcher in 2003. whereby it refers to the interaction between humans and machines, in which a machine has the ability to retain and manipulate referents to real-world objects and surroundings.

    From the above, it can be safely deduced that the Apple Vision Pro, as a Spatial Computer, can indeed be considered a highly advanced technology computer because it represents a significant leap beyond traditional computing systems. Unlike traditional computers that rely on a 2D graphical user interface (GUI), the Apple Vision Pro operates within a 3D environment, immersing users in augmented or virtual reality. This allows for intuitive and natural interactions, where gestures, body movements, and eye tracking become key forms of input, eliminating the need for a mouse or keyboard. By blending the digital world with the physical, the Apple Vision Pro creates a seamless, immersive experience that adapts to the user's surroundings, offering a more human-like interface that facilitates effortless engagement with digital objects and information.

6.3.19 It is submitted by the applicant that the Apple Vision Pro utilizes a 3D user interlace, which can be controlled through eye movements, hand gestures, or voice commands. This differs from traditional computers, which typically use a 2D graphical interface (GUI) that relies on mouse and keyboard input. While touch screens are available on some devices, such as laptops and tablets, the interaction remains largely confined to 2D displays. However, despite these technological differences, the Apple Vision Pro should still be classified as a portable computer (automatic data processing machine), as it performs the principal function of computing and data processing

    It is observed that with advancement in the technology, the efficiency and performance of the products are bound to go up and the law requires that the tariff entries are to be interpreted in ine with the technological advancement. The Hon'ble Supreme Court in the case of Collector of Customs & Central Excise v. Lekhraj Jessumal & Sons 11996 (82) E.L.T. 162 (SC)] as held that words in the traffic schedule need to be interpreted by considering the rapid development of technology as the industry cannot be static. The Hon'ble Supreme Court held as follows:

"3. The High Court in the impugned order noted that the stand of the Customs authorities was that the words "switches, miniaturised" as component parts of hearing aids should be understood to mean only those types of switches which were generally used in the manufacture of hearing aids at the time of publication of the Import Policy for the relevant year, namely 1977, and that these words could not be said to include any other type of switch, even if such other type of switch could be used in the manufacture of hearing aids. The Division Bench observed, in our view, very rightly, that such an interpretation overlooked that industry was not static and that (here was continuous technical progress therein. New processes and new methods developed from lime to time and new material and components or types of components superseded others. It was unreasonable to give a static interpretation to words used in a tariff schedule ignoring the rapid march of technology'. Having regard to the technical opinion that reed switches would improve the performance of hearing aids, the High C 'ourt held that reed switches were covered by the tariff entry. The High Court also noted that it was not the case of the Customs authorities that the respondent was trying to divert the imported reed switches from the manufacture of hearing aids to another purpose.

4. We do not think that we can put it better. Progress cannot be stifled by an over-rigid interpretation of Import Policy or Customs Tariff Both must he read as they stand on the dale of importation and whatever is reasonably covered thereby must be a/lowed to be imported regardless of the fact that it was not in existence or even contemplated when the policy or tariff was formulated."

6.3.20 The Hon'ble High Court of Delhi in case of Vivo Mobile India Pvt. Ltd vs Customs Authority for Advance Rulings /(2024) 25 Centax 386 (Del.)] held that function of the product is relevant for classification under Customs Tariff, not technology used in such product. The relevant para of the said judgments is as follows:

"48. We are of the opinion that, it is not the technology which is used in the product that defines the product and decides its classification under the CTH, but it is the product (which may be created using a particular technology) which decides the classification. For this reason, it is the microphone which has the technology of MEMS, which adds value to the microphone, and it is not the microphone which is adding value to the technology of MEMS. The inclusion of MEMS technology enhances the product's function but does not change Us primary identity as a microphone. "

    Applying the rationale of the above said judgements, it can be safely concluded that the Apple Vision Pro is a portable computer, as it performs the essential function of computing and data processing. The product's additional features, such as the 3D User Interface, voice command, eye tracking and gestures movement etc., are nothing but technological advancement due to which the Apple Vision Pro cannot be made fall under an\ other tariff entry.

6.3.21 As discussed above, it is clear that the Apple Vision Pro. having the primary function of automatic data processing, fall within the scope of Chapter Heading 8471 (Automatic data-processing machines and units thereof magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included), in accordance with Chapter Note 6(A) to Chapter 84 and Explanatory Notes to CTH 8471.

6.4 Now. I take up the matter of classification of the kitted accessories namely Dual Loop Band. Solo Knit Band and Light Seal for Apple Vision Pro under CTH 8473 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472) as claimed by the applicant. Upon reviewing the text of heading 8473. it is evident that parts and accessories specifically designed for use solely or principally with machines classified under headings 8470 to 8472 must be classified under this heading. Therefore, it is necessary to determine whether the items in question namely, Dual Loop Band. Solo Knit Band, and Light Seal can be classified as parts or accessories of the Apple Vision Pro.

6.4.2 The applicant submitted that the Dual Loop Band is designed to securely hold the Apple Vision Pro in place. It consists of upper and lower straps made from narrow woven fabric (webbing) that are adjustable using metal strap adjusters. The two bands are interconnected through a joint, and the Dual Loop Band attaches to the Audio Straps of the Apple Vision Pro with a simple, secure mechanism, featuring release tabs for quick detachment when needed.

    The Solo Knit Band is 3D knitted as a single piece to form a unique rib structure that offers cushioning, breathability and stretch. Made from knit fabric, it also includes a Fit Dial that allows users to adjust the Apple Vision Pro for a custom fit with micro adjustments during use. The Solo Knit Band attaches to the Audio Straps with a secure mechanisrn, and like the Dual Loop Band, it features release tabs for easy removal.

    The Light Seal is composed of stainless steel, thermoplastic elastomer (coated with polyurethane), polycarbonate polyester (Nickel & PVD coated), and is finished with polyester and nylon yarn for a defined aesthetic. It includes a narrow woven elastomeric band that rests on the user's nose. One end connects to the Apple Vision Pro. while the other attaches magnetically to the light seal cushion. The primary function of the Light Seal is to prevent light from leaking into the Apple Vision Pro.

The Dual Loop Band, Solo Knit Band, and Light Seal are all specifically designed for use with the Apple Vision Pro. They enhance the user experience and are not compatible with any other devices.

6.4.3 I note that the terms "parts" and "accessories" are not explicitly defined in the Customs Tariff. However, the Supreme Court, in the case of CCE, Delhi v. Insulation Electrical (P) Ltd. 12008 (224) E.L.T. 512 (S.C.)]. has provided clarification on these terms. In this case, the Supreme Court, while considering various previous judgements, defined "parts" as an "essential component of the whole, without which the whole cannot function." On the other hand, the term "accessory" was defined as something "supplementary or subordinate in nature, which is not essential for the actual functioning of the product".

    Furthermore, the Hon'ble High Court of Delhi, in the case of Vodafone Mobile Services Limited Vs. Commissioner of S.T., Delhi, 12019 (27) G.S.T.L. 481 (Del.)], defined the term "accessory" as an "article or device that adds to the convenience or effectiveness of but not essential to the main machinery".

    According to Chapter 11 (Definitions) of the Foreign Trade Policy (FTP) 2023, "Accessory" or "Attachment" means apart, sub-assembly or assembly that contributes to efficiency or effectiveness of a piece of equipment without changing its basic functions.

    In light of the above, it can be understood that a "part" is a component of equipment or machinery that is essential to its functioning. In other words, a "part" is an integral element of the machinery or equipment, without which the product cannot operate. On the other hand, an "accessory" is something that enhances the convenience or effectiveness of the machine, but it does not contribute to its core functioning.

6.4.4 Therefore, it is essential to examine whether the Dual Loop Band, Solo Knit Band, and Light Seal fall under the definition of "part" or "accessory" for the Apple Vision Pro.

    Based on the applicant's submission and the technical specifications of these products, it becomes clear that these items are not essential for the fundamental functioning of the Apple Vision Pro. The core operations of the Apple Vision Pro, such as its primary display and processing functions, do not rely on these items.

    These products serve to enhance the user experience rather than contribute directly to the operational mechanics of the device. For example, the Dual Loop Band and Solo Knit Band are designed to provide comfort and secure the Apple Vision Pro during use. while the Light Seal helps prevent light leakage, enhancing visual clarity and immersion. While these accessories add to the convenience and comfort of the user, they are not crucial for the basic functioning of the Apple Vision Pro.

    As such, these items do not qualify as "parts" of the Apple Vision Pro, which would imply an essential component necessary for the device's core functions. Instead, they clearly quality as ''accessorie'' because they complement and enhance the overall user experience, improving the comfort, usability, and efficiency of the device.

6.4.5 The HSN Explanatory Notes to CTH 8473 (covers parts and accessories suitable for use solely or principally with the machines of heading 84.70 to 84.72) are extracted as under:

"Subject to general provisions regarding classification of parts (see the General Explanatory Note to Section Note XVI. this heading covers parts and accessories suitable for use solely or principally with the machines of heading 84.70 to 84. 72.

The accessories covered by this heading are interchangeable parts or devices designed to adapt a machine for a particular operation, or to perform a particular service relative to the main function of the machine, or to increase its range of operations"

6.4.6 Upon perusal of the above, it is clear that only those parts and accessories which are suitable for use solely or principally with the products covered under CTH 8470 to CTH 8472 are to be classified under CTH 8473. Further, the term "accessory" includes those products which perform a particular function to increase its range of operations or perform a particular service relative to the main function of the products.

    In the context of CTH 8473, this means that if an accessory is deemed to be primarily intended for use with machines classified under CTH 8470 to 8472, it must be designed to function primarily with those machines, and not with others outside of this category. The accessory's design, function, and purpose must align with the specifications of the machines covered by those tariff headings.

    In the present case, the Dual Loop Band. Solo Knit Band, and Light Seal are designed with specific features, characteristics, and functions that make them suitable only for use with the Apple Vision Pro. Their design, material properties, and purpose are all tailored to complement the Apple Vision Pro's features, enhancing user comfort, fit, and usability. These accessories, by their very nature, are not meant to serve any other purpose outside of their association with the Apple Vision Pro. For example, the Dual Loop Band and Solo Knit Band are crafted to fit securely around the Apple Vision Pro and adjust according to the user's head shape, ensuring a comfortable fit during extended use. The Light Seal is specifically designed to prevent light leakage while enhancing the viewing experience in conjunction with the device. These features are uniquely suited to the Apple Vision Pro. and their specific design and function would not be applicable or useful for other devices.

    Further, the Dual Loop Band. Solo Knit Band, and Light Seal are accessories specifically designed for the Apple Vision Pro. Each of these items serves a distinct function that enhances the usability and operation of the Apple Vision Pro. Each of these accessories plays a crucial role in adapting the Apple Vision Pro for its specific intended use. They are not just add-ons but serve to improve or extend the device's range of operations and ensure it functions as intended. Given that these accessories are designed specifically for the Apple Vision Pro and contribute to its overall performance, they align with the definition provided in the explanatory notes to CTH 8473.

    Thus, based on their objective, characteristics, design, shape, and intended functionality, the items in question namely Dual loop Band. Solo Knit Band, and Light Seal are accessories that are suitable for use solely or principally with the Apple Vision Pro fall under a specific heading or sub-heading under CTH 8471, which deals with automatic data-processing machines and same will qualify for classification under CTH 8473 as per explanatory notes to this heading, as they are designed to perform a specific service related to the Apple Vision Pro and enhance its functionality.

16.4.7 As discussed above, it is clear that the aforementioned goods namely Dual Loop Band. Solo Knit Band, and Light Seal are accessories that are suitable for use solely or principally with the Apple Vision Pro specified under heading under CTH 8471. fall within the scope of Chapter Heading 8473 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472), in accordance with Explanatory Notes to Chapter Heading 8473 and GIR 1. The relevant portion of CTH 8473 is extracted below:

8473 Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines headings 8470 to 8472
  - Parts and accessories of the machines of heading 8470:
8473 21 00 -- Of the electronic calculating machines of sub-heading 8470 10. 8470 21 or 8471 29
8473 29 00 -- Other
8473 30 - Parts and accessories of the machines of heading 8471:
8473 30 10 --- Microprocessors
8473 30 20 --- Motherboards
8473 30 30 --- Other mounted printed circuit boards
8473 30 40 --- 1 lead stack
  --- Other:
8473 30 91 --- Network access controllers
8473 30 92 --- Graphic and intelligence based script technology (GIST) cards for multilingual computers
8473 30 99 --- Other
8473 40 - Parts and accessories of the machines of heading 8472:
8473 40 10 --- Parts of duplicating, hectograph or stencil machines
U73 40 90 --- Other
8473 50 00 - Parts and accessories equally suitable for use with the machines of two or more of the heading 8470 to 8472

    On perusal of the above entries, it is clear that the single dash (-) entry 8473 30 covers "Parts and accessories of the machines of heading 8471" which is further sub-divided. Further, under the CTSH 847330, there is no specific entry at the eight-digit level which covers the aforesaid goods. The CTI 8473 30 99 is a residuary heading which covers "other' parts and accessories of the machines of heading 8471. Thus, the kitted accessories namely Dual Loop Band. Solo Knit Band, and Light Seal are classifiable under the residuary entry of CTI 84733099 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 84/0 to 8472- Parts and accessories of the machines of heading 8471—Other—Other) of the First Schedule of the Custom Tariff Act, 1975 by virtue of Explanatory Notes to CTH 8473 and GIR 1.

7. I also find that the concerned jurisdictional commissionerate i.e. Commissioner of Customs, ACC. Mumbai, submitted that the Apple Vision Pro can be configured by pairing with Apple products such as Phone, iPad and Mac or other ADPM of brand “Apple” and acting as a display device as it shares its physical characteristics with any other similar VR headset which is classified under CTH 8528. Therefore, Dual Loop Band, Solo Knit Band, and Light Seal can also be considered as parts or accessories of a VR headset, which would classify it under 8529.

    In this regard, I observed that the Apple Vision Pro is not simply a device that displays virtual reality (VR) content. It has powerful features, including an integrated advanced processor, which allows it to perform more complex tasks, such as running apps, interacting with 3D environments, and providing computing capabilities far beyond what a typical VR headset would do. The key point here is that it behaves more like a high-end computing device (ADP machine), not just a display device for VR. The Apple Vision Pro incorporates significant computing power, including a high-nd processor that supports real-time interaction with complex applications. This makes it function more like a standalone computer or data processing device. Traditional VR headsets are mainly designed to provide an immersive experience through visuals and possibly some limited interaction. However. the Apple Vision Pro, with its powerful processor and ability to handle complex tasks independently, is much more than just a display. It can be used for productivity tasks, entertainment. and other functions, making it more than just a VR headset.

    Reliance is placed on the case of 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- 0709/2021, decided on 2-2-2022] wherein the Hon’ble CESTAT Delhi while deciding e classification of 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 heading prescribed under Note 5(A) to Chapter 84 by application of GRI 1. In the instant case, the Hon’ble Tribunal also held that the mere presence of a large screen could not imply that the subject goods are classifiable as monitors under CTH 8528, if these goods are otherwise capable of performing a function of ADP machine under Tariff heading 8471.

    In view of the above, it is clear that these items are accessories to the Apple Vision Pro, which is classified under CTH 8471. Therefore, I find no merit in classifying these accessories under CTH 8529 (Parts suitable for use solely or principally with the apparatus of headings 8524 to 8528), as proposed by the concerned commissionerate.

7.2 Further. find that the concerned commissionerate proposed that if the said items are not classified under 8529, then it will be classified as per their actual constituent materials involved.

    In this regard, I observed that as per submission of the applicant, the Dual Loop Band is made up of woven fabric material and the Solo Knit Band, is made up of knitted fabric material while the Light Seal is made up of composite materials including stainless steel, thermoplastic elastomer (coated with polyurethane), polycarbonate polyester (Nickel & PVD coated), and polyester and nylon yarn.

    I find that the concerned commissionerate has not referenced any specific chapter that would apply to the classification of these accessories based on their constituent materials. While Chapter 61 and Chapter 62 of the Harmonized System cover articles made of textile materials, such as clothing and other items for human use, these chapters do not cover accessories related to electronic devices, particularly those falling under heading 8471, which includes computers and other data processing machines.

    As the accessories in question are specifically designed for use with the Apple Vision Pro. which is classified under CTH 8471, they are best classified under the relevant heading for accessories of data processing machines. The materials themselves do not change the functional nature of the items, which are accessories designed for electronic devices. Therefore, I do not find any specific heading under Chapter 61, 62 or any other chapter that would apply to these accessories based on their constituent materials.

    In view of the above, the contention of the concerned commissionerate to classify the goods under CTH 8529 or according to their constituent materials does not appear to be tenable.

    8. In view of the above discussions and findings, I reach to conclusion that the kitted accessories of Apple Vision Pro namely Dual Loop Band, Solo Knit Band, and Light Seal are classifiable under CTH 8473 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472), more specifically under CT1 84733099 (Parts and accessories (other than cover, carrying cases and the like) suitable for use solely or principally with machines of headings 8470 to 8472- Parts and accessories of the machines of heading 8471----Other----Other) of the First Schedule of the Custom Tariff Act, 1975.

9. I rule accordingly.

(Prabhat K. Rameshwaram)        
Customs Authority for Advance Rulings.
Mumbai.                       
 

F. No. CAAR/CUS/APPL/94/2024-O/o Commr-CAAR-Mumbai             Dated: 27-01-2025

This copy is certified to be a true copy of the ruling and is sent to:

1. M/s. Apple India Private Limited
13th Floor. Prestige Minsk Square.
Municipal No. 6, Cubbon Road.
Bangalore. Karnataka-560 001.
EmaiI: raglumathl86@applc.com

2. The Commissioner of Customs-III(lmport)
Air Cargo Complex. Sahar, Andheri (East).
Mumbai- 400099
Email- import.acc@gov.in

3. The Customs Authority for Advance Rulings.
Room No. 24. New Customs House.
Near IG1 Airport. New Delhi-110037.
Email: cus-advrulings.del@gov.in

4. The Principal Chief Commissioner of Customs. Mumbai Customs Zone-I. Ballard Estate. Mumbai -400001. Email: ccu-cusmum1@nic.in

5. The Commissioner (Legal). CBIC Offices,
Legal/CX.8A. Cell, 5th floor. Hudco Vishala Building.
C-Wing, Bhikaji Cama Place. R. K. Puram. New Delhi - 110066.
Email: commr.legal-cbce@nic.in

6. The Member (Customs), Central Boards of Indirect Taxes & Customs. North Block. New Delhi-110001 ._Email: mem.cus-chec@nic.in

7. The Webmaster. Central Boards of Indirect Taxes & Customs. Email: webmaster.cbec@icegate.gov.in

8. Guard file

(Vivew Dwivedi)               
Dy. Commissioner & Secretary      
Customs Authority for Advance Rulings.
Mumbai