2025(05)LCX0426(AAR)

Mustek Technologies Private Limited

decided on 30-05-2025

Customs Authority for Advance Rulings 

New Custom House, Ballard Estate, Mumbai - 400 001

E-MAIL: cus-advrulings.mum@gov.in

N.B.,

1. A copy of this order made under sub-section (2) of Section 28-1 of the Customs Act, 1962 is granted to the concerned free of charge.

2. Any appeal against this Advance Ruling order shall lie before the High Court of concerned jurisdiction, within 60 days from the date of the communication of such ruling or order.

3. The advance ruling pronounced by the Authority under Section 28 - 1 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.

4. 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. Mustek Technologies Private Limited (IEC No.: 0715008901) (hereinafter referred to as 'the Applicant’) filed an application (CAAR-1) for advance ruling in the Office of Secretary, Customs Authority for Advance Ruling (CAAR) Mumbai. The said application was received in the secretariat of the CAAR, Mumbai on 11.02.2025 along with its enclosures in terms of Section 28H(1) of the Customs Act, 1962(hereinafter referred to as the ' Act also’). The Applicant is seeking advance ruling on the issue of classification of Mobile Computers, Tablet Computers and Vehicle Mounted Computer under CTI 84713090 as portable computer, of the First Schedule of the Customs Tariff Act, 1975, or otherwise. The models proposed to be imported under each category are as follows:

Table-1

2. Submission by the Applicant:

2.1 M/s Mustek Technologies Private Limited (hereinafter referred to as the "Applicant") is a Company incorporated in the year 2015 under the Companies Act, 2013. The Applicant is a pioneer in the Automatic Identification and Data Capture (AIDC) Technology field. The Applicant is engaged in trading of barcode scanners and printers of well-known brands such as Honeywell, GODex, Datalogic and Newland AIDC,

2.2 The present application pertains to 'Portable Computers’. These portable Computers are of the following forms:

i. Mobile Computers

ii. Tablet Computers

iii. Vehicle-Mounted Computer

2.3 These are non-rigid categorizations based on difference in Processor Speed and Number of Cores, Display Screen Size, With Keypad without Kaypad, Wi-FI Radio Standard 802.11 a/b/g/n or ac (Data download speed varies), Battery Capacity, Automatic Identification Sensor like Barcode Scan Engine, RFID Reader Module, NFC or GPS and Form factor of Device like device with Gun Grip for Intensive Barcode Scanning Requirements, Devices with Bigger Screen where lot of Data needs to be shown to the User etc.

2.4 The models proposed to be imported as under each category are mentioned in above said Table-1. The aforesaid devices are collectively referred to hereinafter as "proposed imports" or "Portable Computers". Each model is available in options of with SIM (WWAN) or without SIM (WLAN).

About Portable Computers in General

2.5 Portable Computers are handheld/wearable/vehicle mountable computers. They are essentially used for scanning barcode and for processing data in real time to increase efficiency of functions such as inventory management, last mile delivery, invoicing, etc.

2.6 A portable computer is a combination of Personal Computer and scanner, largely utilised by field service personnel. The product carries a processing ability of a laptop and ability functionality of a scanner in a single wireless device.

2.7 These Portable Computers essentially perform ID and 2D barcode scanning and additionally have features like Wi-FI/Bluetooth connectivity, data transfer etc.

2.8 The actual use of these devices is in warehousing/logistics/inventory operations for data capturing/storage and its transmission for allied functions

2.9 Portable computers are generally categorized into following types:

• Handheld/Mobile Small, yet durable, devices that extend organizational knowledge into the field by combining scanning and processing functions into a single device.
   

• Wearable devices that come equipped with the latest technology for streamlined picking, packing, and shipping.
   

• Vehicle-mounted Rugged mobile workstations that attach to industrial vehicles such as trucks, forklifts, and carts. (The present application is not concerned with this type).
   

• Tablets Handheld computers that securely transmit data over high-speed networks using the familiar design and functionality of consumer tablets while enjoying the durability of enterprise scanning devices.

2.10 The three types of Portable Computers concerned in present case are explain in detail below:

Table-II

Communication Capabilities

2.11 As evident from Table-I above Portable Computers are available with SIM as well as without SIM connectivity. Communication functions, if any, are generally performed by the Portable Computers using Wi-Fi or wired connectivity. Only when such wireless internet is not available, the devices use cellular network to function (if devices have Sim Card capability and have been fitted with the Sim Card). Thus, cellular network is used only rarely in cases such as during last mile delivery, when Wi-FI is not readily available etc. In fact, calling function provided in Products with SIM is purely a supplementary function since the same has been provided as an additional mode of connectivity apart from Bluetooth, Wi-FI and GPS.

3. Applicants interpretation of Law/Facts:

3.1 The applicant submitted that they satisfy all the criteria required for filing the application for advance ruling, namely:

(a) The Applicant has been granted a valid Importer-Exporter Code Number (IEC) under section 7 of the Foreign Trade (Development and Regulation) Act, 1992;

(b) The Applicant is filing the Application in respect of goods prior to their importation into India;

(c) The application for advance ruling is in relation to clause (a) of Section 28H (2) of the Customs Act, 1962; and

(d) The application is not barred under Section 281 of the Customs Act, 1962.
Thus, the present application must be allowed to be proceeded with.

CLASSIFICATION OF PORTABLE COMPUTERS

3.2 The classification of the goods imported into India is to be determined based on the General Rules of Interpretation (hereinafter referred to as the "GRI'’) set out in the Tariff. As per Rule 1 of the GRI, classification of the imported products shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the remaining Rules of the GRI.

3.3 The Tariff is aligned, up to the 6-digit level, with the Harmonized System of Nomenclature (’HSN’) issued by the World Customs Organization ('WCO'). It has been held by the Hon’ble Supreme Court in the case of Collector of Customs, Bombay vs. Business Forms 2002 (142) ELT 18 that the HSN Explanatory Notes aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same.

3.4 Heading 8471, inter alia, covers automatic data processing machines and units thereof. The Heading also includes portable ADP machines that do not require an external electrical output for functioning.

PORTABLE COMPUTERS ARE CLASSIFIABLE AS AUTOMATIC DATA PROCESSING (ADP) MACHINES UNDER HEADING 8471

3.5 The applicant understood that to qualify as an ADP Machine, the goods have to satisfy all the conditions mentioned in Note 6(A) to Chapter 84 and should not be covered by Note 6(D) and 6(E) ibid. The Applicant submits that the Portable Computers in question comply with the above requirements and therefore, are classifiable as ADP Machined under Heading 8471 as tabulated below:

3.6 Thus, the proposed imports satisfy all the conditions to be fulfilled by an ADP Machine. Thus, the proposed imports are ADP Machines. Further, the HSN Sub Heading 8471.30 states that a portable automatic data processing machines would be one weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display. The Portable Computers proposed to be imported contain all three of the above units, i.e., input units in the form of a keyboard (physical or digital / touch screen), a central processing unit (inbuilt) in the form of processor and a display unit (the screen). Therefore, all the requirements to be an ADP machine is satisfied in the instant case.

3.7 Therefore, by application of Rule 1 of the GIR, the portable computers are correctly classifiable under Heading 8471, more specifically under Tariff Item 84713090 as they are not personal computers.

3.8 Further, in addition to the above submissions, in respect of the each of the concerned products, these products have specific professional grade scanners in built into the devices and the same demonstrates how the scanning and processing function for the devices is the primary function. This is what sets these devices apart from the conventional phone/communication devices available in the market.

Without prejudice to the foregoing submissions, Chapter Note 6(D) and 6(E) read with Chapter Nbte 6(C) are not applicable .for the classification of the Portable Computers in question

3.9 Note 6(C) of Chapter 84 states that a unit can be treated as part of ADP system if the conditions mentioned therein are satisfied. However, this is subject to the Chapter Notes 6(D) and 6(E) ibid. Note 6(C) is applicable only for units of ADP Machine. In the present case, the portable computers proposed to be imported are ADP Machines themselves, and not merely units of ADP machine. Therefore, the above Note is not applicable to the portable computers in question.

3.10 Similarly, it is submitted that Chapter Note 6D is not applicable to ADP Machines but is instead only applicable to Units of ADP Machine. Therefore, even this Chapter Note is not applicable to the Portable Computers in question.

3.11 As far as Note 6(E) is concerned, it is extracted below:

“(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.''

3.12 The above too will not apply as the portable computers concerned are not merely working in conjunction with an ADP machine but are ADP machines themselves.

3.13 Note 6(D) to chapter 84 lists certain separately presented products that are to be excluded from heading 8471, even if they can be classified as part of an ADP system. Note 6(E) to chapter 84 mentions that a machine 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. As the impugned devices, are akin to ADP machines performing capturing of data and its further processing, the notes 6(D) and 6(E) do not have application in this case.

The principal function performed by the Portable Computers is that of ADP Machine

3.14 Without prejudice, even if it is assumed that the Portable Computers viz. N4obile Computers, Tablet Computers and Vehicle-mounted Computer capable of performing more than one function, i.e., capable of functioning other than as an ADP machine, the function of the ADP machine is the principle function and therefore, shall be treated as an ADP machine in terms of Section Note 3 of Section XVI of the Tariff.

3.15 This is also supported by Chapter Note 8 to Chapter 84 which states that '/i machine which is used for more than one purpose is, for the purposes of classifIcation, to be treated as if its principal purpose were its sole purpose.

3.16 The Portable Computers are marketed to businesses for use in their warehouses or for ease of logistics and not as a substitute as a communication device. That the Portable Computer is used/can be used to transmit other data, apart from the inventory related data, the function is only an incidental function, and the classification is to be based as if the principal function were the sole purpose.

3.17 in view of the above, the Applicant submits that proposed imports are classifiable under Heading 8471, more specifically under Tariff Item 84713090 as ADP Machines as the principal function is that of ADP Machine.

Commercially too, the products are known as 'Computers ’ and not as Phone / Communication Devices

3.18 As per the trade parlance, the proposed imports are known in the market as Mobile Computers, Tablet Computers and Vehicle-Mounted Computers and not as smartphones or telephones.

• THE PRODUCT BEING AN ADP MACHINE, IS NOT CLASSIFIABLE UNDER HEADING 8517

3.19 The Heading 8517 covers “Telephone sets, incIuding smartphones and other telephones for cellular networks or other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication ina wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528’ . Reference is made to the definition of 'smartphone’ in Note 5 to Chapter 85, extracted below.-

“5. For the purposes of heading 8517, 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.

3.20 Further reference is made to the HSN Explanatory Notes to Heading 85 17:

''This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical Wave flowing in a wired network or by electro-magnetic waves in a wireless network.

3.21 Further, the HSN Explanatory notes for Heading 8517 covers “ Other Apparatus for 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)”, where various types of devices that are covered under this entry are provided.

3.22 The portable computers are not classifiable under Heading 8517 because:

i. They are not primarily meant for communication purposes. Communication abilities like that of a traditional telephone/mobile telephone is only an ancillary function that these Portable Computers perform.

ii. The fact that that Portable Computer is different from conventional cellular phones/communication devices, as evident from below:

3.23 Furthermore, Portable Computers are different from a traditional cellular phone as they are meant for Enterprise operations. They are more robust construction and can survive accidental drops to ground, can survive water splashing/immersion and dust based on its Ingress Protection rating. A mobile Computer comes with Barcode Scan Engine which is specialized with a Laser Aimer to point at Barcode, llluminator LED and Camera to capture Barcode. The Barcode Scan engine has an inbuilt Barcode Image Decoding Algorithm to get Data encoded in a Barcode. Unlike Mobile Phone Camera which is able to read QR Codes. Portable Computers are able to read almost all Barcode Symbologies. A barcode Symbology is like a Language. Different Barcode Symbologies are in prevalence in different industries and a Portable Computer is equipped to read all of them. Similarly, a Portable Computer is also equipped with RFID reader to wirelessly identify RFID Tags placed on Cartons, a Portable Computer with Barcode/RFID Automatic Identification sensors help Automate the Supply chain process across Enterprises.

3.24 Therefore, the Portable Computers are not classifiable under Heading 85 17.

The products in question are not classifiable as "smartphones"

3.25 The Tariff Entry 85171300 covering “Smartphones” was introduced vide Finance Act, 2021. As per the definition given, the way it is worded, it is understood that the product (smartphone) is a telephone for cellular network, having additional features of ADP Machine and some few more features

3.26 The above entry is not applicable to the Portable Computers without SIM Cards (as they have no cellular connectivity). Further, even in respect of the Portable Computers that have SIM Card capability, the definition of smartphone (extracted above) is not applicable for the following reasons:

a. The definition itself shows that 'smartphones’ are telephones with few additional features of ADP machine. Unlike 'smartphones’ the proposed imports are essentially ADP Machine which have an additional feature of cellular connectivity. Thus, the principal and ancillary functions in proposed imports and smartphones, are diametrically opposite.

b. The way the proposed imports are built, it is evident that it is meant for rugged use and is not sleek like smartphones in similar price range. The proposed imports also don’t have most of the features there in smartphones of similar price range.

C. Furthermore, smartphones of the same price range as the impugned product, are marketed as luxury items for the personal use whereas the impugned products are purely used industrially. Their designs are not sleek or sophisticated like that of smartphones and are rather designed to be used in arduous environment and are made to withstand hardy environment.

d. As per the trade parlance, the products in question are known in the market as ADP Machines and not as smartphones or telephones.

• APPLICABILITY OF CBIC’S CIRCULARS & WCO RULINGS FOR THE CLASSIFICATION OF THE PORTABLE COMPUTERS

3.27 The applicant has relied on Circular No. 20/2013 dated 14.05.2013, where in the CBIC issued a clarification regarding the classification of ’Tablet Computer'. In this Circular, the Board analysed the functions of a Tablet Computer and held that its principal function is that of a of a Computer, and communication (even using SIM) is merely incidental and therefore, Tablet Computer is classifiable as an ADP Machine. Thus, the Circular likens the product to a Laptop or Computer and holds that as it satisfies the requirements under Note 5 A to Chapter 84, it will be classified as an ADP Machine. The Circular also reaffirms the ruling of World Customs Organization, regarding Tablet Computer.

3.28 it was also held in the matter of Commissioner of Customs (/4cc & Import) v. Samsung India Electronics P. Ltd. reported in 2019 (4) TMI 915 - CESTAT MUMBAI that the Tablets imported were more suited for the purpose of working/reading rather than for the purpose of telephony, specifically as a mobile device, and thus were classifiable under Heading 8471 and not Heading 8517

3.29 The above findings regarding Tablet Computers will apply to all the Portable Computers concerned in present case, all the three forms of computers are essentially the same, and just their form is different. These similarities are evident from the following:

a. These devices are marketed with focus on their data processing function.

b. These devices are available for sale with SIM Slot or without SIM Slot- this shows that emphasis is not on the SIM function (as if it was, it would have been a standard feature and not an optional feature).

c. These devices are portable alternatives to laptops and computers and are marketed as more easily portable forms of laptops/computers.

d. These products are not marketed as a replacement to a conventional device like cellular phones or smart phone or any other such communications devices.

3.30 Further, Portable Computers combine PC and scanning functions into a single device that can be outfitted with off-the-shelf or custom software applications that perform everyday tasks, such as monitoring deliveries, tracking assets, and managing inventory. And because they run on familiar operating systems such as Windows, Android, they offer the same functionality as a desktop computer or laptop. These processors are also equipped with a barcode scan engine and act as their own host, which means one can instantly update and edit information as it is captured. Thus, the Circular applies to all types of Portable Computers as well and supports its classification under Heading 8471.

WCO Ruling on RFID Readers is not applicable

3.31 During its 68th Session, World Customs Organization considered RFID readers, having inter-alia SIM capability, and held that the same is classifiable under Heading 8517 as 'Smartphones’. As already demonstrated above, the note on smartphones is not applicable to the present portable computers. The note regarding smartphone clearly states that these devices are telephones for cellular networks designed to perform the functions of ADP machines.

3.32 The portable computers in question have many features such as higher scanning capacity, data editing functionality, ruggedness and enterprise-level security features, which a smartphone for cellular connection lacks. These devices are used by enterprises to capture data. The products are used in inventory management, store receiving, order processing, package tracking, tracing delivering etc. These devices use Wi-FI connectivity and Bluetooth for information sharing. Cellular connectivity is essentially used for GPS and information sharing, where Wi-FI is not available.

3.33 However, as mentioned earlier:

a. 31 out of 62 models concerned in present case do not have cellular connectivity; and

b. identical models are available both with and without cellular connectivity options that is, SIM capability is just an additional feature to the main product.

3.34 Thus, many devices do not have the functionality of cellular connectivity, which shows that the SIM is not an integral part of these devices, as these devices are able to perform their primary function with or without the SIM card. These devices are not convenient for the purpose of telephony. Thus, the portable computers imported are rightly classifiable under Heading 8471.

3.35 Further, the aforementioned WCO Ruling is not applicable to the present case for the following reasons:

a. Unlike the Ruling on Tablet Computer, which has been expressly accepted by CBIC, no similar Circular has been passed accepting and adopting the above ruling.

b. The proposed imports are Portable Computers and not merely RFID Readers.

c, The Ruling on Tablet Computer is more appropriately applicable to the proposed Imports.

d. Heading 8471 has not at all been considered by the WCO in the aforementioned Ruling.

3.36 Thus, the imported products are rightly classifiable under Heading 8471 as Automatic Data Processing Machines, and not under Heading 85 17.

4. Port of Import and reply from jurisdictional Commissionerate:

4.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e. Mobile Computers, Tablet Computers and Vehicle Mounted Computer as listed in Table-1 at the jurisdiction of Office of the Commissioner of Customs, Air Cargo Complex, Bangalore. The application was forwarded to the Office of the Commissioner of Customs, Air Cargo Complex, Bangalore for their comments on 28.02.2025, 24.03.2025, 09.04.2025 & 30.04.2025.

However, no response/comment in this matter has been received from the concerned Commissionerate till now.

5. Details of Hearing

5.1 A hearing was conducted on 29.04.2025 at 01.00 PM. Ms. Srinidhi Ganeshan and Ms. Kratik Patni, Authorized Representatives on behalf of the applicant, appeared online for the hearing and reiterated the contentions submitted in the application that all the three products i.e. Mobile Computer, Tablet Computer and Vehicle Mounted Computer merit classification under CTI 84713090. They contended that all the four parameters/conditions/qualification given in Section Note 6(A) under Chapter 84 are applicable on these products as ADP Machine. They relied upon several case laws and HSN Explanatory Notes. It was asked to provide the literature on product namely vehicle mounted computer for that they seek one-week time which is permitted.

Nobody appeared on behalf of the department for the hearing.

Additional Submission

6.1 The applicant vide their letter dated 06.05.2025 made the following additional submissions regarding the vehicle mounted computer:

•  Vehicle mounted computers are rugged devices designed for installation on vehicles like forklifts, trucks, and buses, enabling efficient and accurate inventory management and realtime data access for logistics and warehouse operations. They are built to withstand harsh environments such as vibration, shock, extreme temperatures, dust and moisture-ensuring reliable operation in industrial and outdoor settings. Vehicle Mounted Computers significantly boost productivity by enabling workers to access inventory systems, scan products, and communicate directly from their vehicles, reducing errors and saving time. Vehicle Mounted Computers have built-in GPS for navigation, wireless connectivity for data exchange and options for barcode or RFID scanning to streamline iaventory and asset management.
   

• Vehicle Mounted Computers are highly versatile, supporting various applications such as field service management, mining, agriculture and transportation. Additionally, they enhance accuracy by automating data entry and processing, minimizing human error, and allowing on-the-spot information verification. > in view of the above, it can be concluded that, Vehicle Mounted Computers are Automatic Data Processing (hereinafter referred to as “ADP”) machines that can store processing programs, be freely programmed, perform arithmetical computations and execute processing programs without human intervention
   

• it is submitted that Vehicle Mounted Computers function independently of the vehicles they are mounted on. This is also evident from the enclosed product brochure, which clearly demonstrates that the product can be easily interchanged without interrupting its functioning, indicating that their operation is independent of their attachment to the vehicle.
   

• Additionally, Vehicle Mounted Computers have an integrated power converter and ignition control to prevent productivity loss due to a dead vehicle battery. In other words, Vehicle Mounted Computers, though mounted on vehicles such as trucks, forklifts, carts, etc. for convenience, will function even if the vehicle they are mounted on does not operate due to battery loss9 as Vehicle Mounted Computers do not require an external electrical output for functioning.
   

• To qualify as an ADP machine, the goods have to satisfy all the conditions mentioned in Note 6(A) to Chapter 84 and should not be covered by Note 6(D) and 6(E) ibid. The Applicant submits that the Vehicle Mounted Computer in question complies with the above requirements and therefore, it is classifiable as ADP Machined under Heading 8471 as tabulated below:

Thus, Vehicle Mounted Computers satisfy all the conditions to be fulfilled by an ADP machine. Thus, the Vehicle Mounted Computers are ADP machines.

DISCUSSION AND FINDINGS

7.1 i have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made during the hearing as well as additional submission made by the applicant. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework.

7.2 The Applicant has sought advance ruling in respect of the following question:

a. Whether the products i.e. Mobile Computers, Tablet Computers and Vehicle Mounted Computer as mentioned in Table-1, are classifiable under CTI 84713090 as portable computer, of the First Schedule of the Customs Tariff Act, 1975, or otherwise.

7.3 At the outset, I find that the issue raised in the question in the Form C:AAR-1 is squarely covered under Section 28H(2) of the Customs Act, 1962 being a matter related to classification of

7.4 Before deciding on 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.

7.5 The applicant has submitted that the devices in question, namely Mobile Computers, Tablet Computers, and Vehicle-Mounted Computers, are Portable Computers. These devices are designed to be handheld, wearable, or mounted on vehicles, and are primarily used for barcode scanning and real-time data processing to enhance the efficiency of operations such as inventory management, last-mile delivery, invoicing, and similar functions.

A Portable Computer is essentially a combination of a personal computer and a barcode scanner, widely used by field service personnel. These devices offer the computing power of a laptop along with the scanning capabilities of a dedicated scanner, integrated into a single wireless unit. They are capable of performing ID and 2D barcode scanning and come equipped with features such as Wi-Fi, Bluetooth connectivity, and data transmission capabilities. The primary applications of these devices are found in sectors such as warehousing, logistics, retail, transportation, manufacturing, healthcare, public services, and inventory management. in these environments, portable computers are used for capturing, storing, and transmitting data to support various operational functions.

These Portable Computers as shown in above Table-I, are available in variants with or without SIM card connectivity. Communication functionalities are typically carried out via Wi-Fi or wired connections. The use of cellular networks is limited to situations where Wi-Fi is unavailable such as during last-mile delivery. Importantly, the calling function present in SIM-enabled devices is considered purely supplementary, offered as an additional communication mode alongside Bluetooth, Wi-Fi, and GPS connectivity options.

7.6 The issue before me is to decide the classification of Mobile Computers, Tablet Computers, and Vehicle-Mounted Computers. These are handheld/wearable/vehicle mountable portable devices used in enterprise environments to run mobile apps, capture barcodes, take photos and videos, and provide voice and data communications for workers and managers. These devices combine personal computer and scanning functions in a single wireless device that can be outfitted with off-the shelf or custom software applications that perform everyday tasks such as monitoring deliveries, tracking assets, and managing inventory. Because they run on familiar operating systems such as Windows/Android, they offer the same functionality as a desktop computer or laptop. These processors are also equipped with a barcode scan engine and act as their own host, which means one can instantly update and edit information as it is captured. The applicant has suggested Customs Tariff heading 8471 as an appropriate classification for these devices.

7.7 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 847 1, 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 connectable 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 (iii) above, are in all cases to be classified as units of heading 8471.

(D) Heading 847 1 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 wired 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.

7.8 Therefore, there is a need to examine whether the features and specifications of the device under consideration meet the criteria as laid down in the relevant Chapter Note reproduced above. For any device to be held as an ADP and cIassifiable under sub-heading 8471, four essential conditions as mentioned above in Note 6(A), are required to be satisfied and should not be covered by Note 6(D) and 6(E) ibid.

7.9 As per the technical specifications submitted by the applicant and discussed in paragraph 3.5 above, the impugned devices satisfy the criteria of Automatic Data Processing (ADP) machines as outlined in Note 6(A) to Chapter 84. Note 6(C) of Chapter 84 specifies the conditions under which a unit may be classified as a component of an ADP system. Howev9r, based on the functionality and features of the impugned devices, it is evident that they are not merely components of  ADP systems, but rather independent ADP machines in their own right. Note 6(D) to Chapter 84 identifies certain separately presented products that are to be excluded from classification under heading 8471, even if they are capable of functioning as part of an ADP system. Furthermore9 Note 6(E) provides that machines which incorporate or operate in conjunction with ADP machines and perform a specific function other than data processing are to be classified under the heading appropriate to their specific function, or, where such a heading does not exist, under residual headings. In the present case, the impugned devices, as described by the applicant, are comparable to ADP machines engaged in data capture and subsequent processing. Therefore, Note 6(D) and 6(E) are not applicable.

7.10 From the above, it can be concluded that these portable computers are 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, these portable computers namely Mobile Computers, Tablet Computers and Vehicle Mounted Computer meet 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).

7.11 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:

“(1) 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 simultaneously the 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 Bled 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 $nite 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 wra97tetic 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. F a visual display unit) or may consist o/ 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 {}}gP jRQrgw4}.which can be processed by the machine,

(3) An output unit which converts the signals provided by the machine into an intelligible form (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. ”

7.12 The features and specification of the aforesaid goods, also clearly show that these Portable Computers namely Mobile Computers, Tablet Computers and Vehicle Mounted Computer consist of a processor for processing the data and programs. a LED Screen, which serves as the output source, and a keyboard or touch screen as virtual keyboard, which acts as the source of input. Therefore, in light of the above Chapter Note and Explanatory Notes, the aforesaid goods 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.

7.13 As discussed above, it is clear that the aforementioned goods, 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.

It can be observed that the aforesaid goods are automatic data processing machine, which is portable and weighing less than 10 kgs. Thus, the product falls within the scope of first single dash (-) entry 8471 30 which covers “portable automatic data processing machines, weighing not more than 10 kgs, and consisting of a central processing unit, a key board and a display” . Under the first single dash (-) entry 8471.30, there are two triple dash (-–) entries available as follows:

The first triple dash (---) entry under tariff item 847 13010 refers to ' personal computers ’. It is observed that personal computers, such as desktop computers, are typically designed to be placed on or under a desk. In the present case, however, the products in question are designed to be handheld, wearable, or mounted on vehicles, distinguishing it from a traditional personal computer. Therefore, it does not fall within the scope of CTI 84713010 (personal computer) and should instead be classified under the next triple dash (---) entry, CTI 84713090 (Other) .

Thus, by virtue of GIRI, Explanatory Notes, Chapter Note 6(A) to Chapter 84, these Portable Computers namely Mobile Computers, Tablet Computers and Vehicle Mounted Computer as listed in Table-1 above, are classifiable under CTI 84713090 (Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display-Others) of the First Schedule of Customs Tariff Act, 1975.

7.14 in respect of possible alternate heading 8517, there is a need to examine the features of these devices in the context of Note 3 to Section XVI of the Customs Tariff Act. The 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 ofvoice, 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 cellular connectivity in 31 out of 62 devices, the classification under heading 8517 needs to be examined.

Note 3 to section XVI of the Customs Tariff Act stipulates that," Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function" . From the note, it is clear that a composite machine performing various functions is to be classified according to the principal function performed by such a device.

In the instant case, these devices combine computing and scanning functions for monitoring deliveries, tracking assets, and managing inventory. 31 out of 62 devices also have communication capabilities. However, for the products under consideration, automatic data processing appears to be the main function, while other functionalities of said machines 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 14-5-2013, clarification has been given by the Central Board of Excise and Customs (CBEC) 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 impugned devices is barcode scanning and data processing for monitoring deliveries, tracking assets and managing inventory. Therefore, these devices appear to merit classification under heading 8471 and not under heading 8517.

7.15 in regards to the classification opinion of the 68th session of the Harmonized System Committee, it is observed that the committee has classified RFID/barcode readers with a mobile operating system capable of scanning and cellular connectivity under subhading,8517 13. This subheading covers smartphones. Note 5 to chapter 85 states that '' For the purposes of heading  85.17, the term "smartphones" means "telephones for cellular network equipped with a mobile ,operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems" The note clearly states that these devices are telephones for cellular networks designed to perform the functions of ADP machines. However, the devices under consideration are principally not telephones for cellular networks. In fact, 31 out of 62 models do not have the functionality of cellular connectivity, which shows that the SIM is not an integral part of these devices, as these devices are able to perform their primary function with or without the SIM card. These devices do not appear to be convenient for the purpose of telephony as a principal function. As per circular no. 20/2013- Cus., dated 14-5-2013, "the difference between a "smartphone" and "tablet computer", is not based on whether the product has a voice calling function or not, but on the principal features that a producer has intended for the device when designing and developing it". These devices are essentially ADP machines with additional connectivity capabilities, including cellular connectivity for 31 models, as discussed at para 7.14. Further, the difference between a smartphone and the devices under consideration, as explained by the applicant, is already reproduced in tabulated form at para 3.22. The impugned devices have many features such as higher scanning capacity, ruggedness and enterprise-level security features, which a smartphone for cellular device connection lacks. These devices are used by enterprises to capture data. As already stated the products are used in inventory management, store receiving, order processing, package tracking, tracing delivering etc. These devices use Wi-Fi connectivity and Bluetooth for information sharing. Cellular connectivity is essentially used for GPS and information sharing, where Wi-Fi is not available. Cellular connectivity is also used for making calls. However, as mentioned earlier, 31 out of 62 models do not have cellular connectivity. In view of forgoing discussion and facts on record, it is my considered opinion that the devices under consideration are not classifiable as smartphones. They merit classification under subheading 8471 30 90

8. On the basis of foregoing discussions and findings, I reach to conclusion that the products namely Mobile Computers, Tablet Computers and Vehicle Mounted Computer as listed in Table-1 (Para 1) above, merit classification 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), more specifically under CTI 84713090 (Portable automatic data-processing machines, weighing nor more than 10 kg, consisting of at least a central processing unit, a keyboard and a display-Others) of the First Schedule of Customs Tariff Act, 1975 .

9. 1 rule accordingly.

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

F. No. C AAR/CUS/APPL/25/2025-O/o Commr-CAAR-Mumbai                     Dated: 30 -05-2025

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

1. M/s. Mustek Technologies Private Limited
35/B, Doddanekkundi Industrial Area,
Behind IFB Automotive Mahadevapura Post,
Bengaluru - 560048
{ Email: aneesh@mustekindia.com }

2. The Commissioner of Customs,
Airport & Air Cargo Commissionerate,
Devanahalli, Bangalore 560 300.
(Email: commrapacc-cusblr@nic.in)

3. The Customs Authority for Advance Rulings,
Room No. 24, New Customs House,
Near 101 Airport, New Delhi-1 10037.
Email: cus-advrulings.del@gov.in

4. The Chief Commissioner of Customs,
Mumbai Customs Zone-1, Ballard Estate,
Mumbai -400001.
Email: ccu-cusmum@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 – 1 10066.
Email: anishgupta. irs@gov.in, commr.legal-cbec@nic.in

6. The Member (Customs), Central Boards of Indirect Taxes & Customs, North Block, New
Delhi-110001.
Email: lnembercus.cbic@gov.in

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

8. Guard file.

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