Customs | Barcode Scanners With Ancillary Mobile Features Not Classifiable As Smartphones; Exempted From Basic Duty: CESTAT New Delhi
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that handheld barcode scanners, whose principal function is scanning, do not become smartphones merely because they have ancillary mobile features. The bench further stated that these scanners are entitled to exemption from Basic Customs Duty. Dr. Rachna Gupta (Judicial Member) and P.V. Subba...
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that handheld barcode scanners, whose principal function is scanning, do not become smartphones merely because they have ancillary mobile features. The bench further stated that these scanners are entitled to exemption from Basic Customs Duty.
Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) stated that in the documents on record in the form of brochures, invoices, packing list etc., the imported goods are described as a Handheld Scanners. They are known as such to trade. Hence, there is no reason to hold that the product is smart phone merely because the product has an ancillary function of being used a smart phone.
In the case at hand, the assessee/appellant was engaged in providing IT solutions to the businesses.
The assessee imported six different types of 'Newland NLS Handheld Barcode Scanners' and classified them under CTH 8471 6050. The exemption from Basic Customs Duty was claimed, as it was not payable on import of goods falling under CTH 84716050.
The adjudicating authority, however assessed the consignment of scanner and alleged that the imported goods are classifiable under CTH 85171300.
The assessment order was passed holding that the imported goods are not the scanners classifiable under CTH 84716050 but are telephones for cellular network/mobile phones rightly classifiable under 85171300. The goods of the said CTH since were not eligible for any exemption of Basic Customs Duty.
The classification under CTH 84716050 was rejected and the customs duty was reassessed under CTH No. 85171300. The said order has been upheld by Commissioner (Appeals) vide the impugned order.
The assessee argued that principal function of the imported product is bar reading/scanning the product/scanners are preinstalled with a special hardware for the purpose. The fact that the imported product has additional feature/functionality such as display screen, dual SIM card slot, Blue tooth camera etc. They have been wrongly classified as mobile phones.
It was further submitted that the purpose of the said additional functions is merely to enhance the principal functioning of scanning bar codes. These functions are merely ancillary to the function of scanning. The product was rightly classified as scanner under CTH 8471 60 50.
The revenue submitted that though the goods in question are declared as Handheld Bar Code Scanners but the product fulfilled all the criteria as is required for the goods to be classifiable as “smart phones”. Hence it was rightly held classifiable under 85171300.
The Tribunal opined that since the mobile phone functionality in the impugned gadget is ancillary and specific function is that of scanner. The imported goods are to be classified as scanners (8471) CTH instead of mobile phone (8517) CTH.
The bench noted that the imported goods was comparatively bigger than the mobile phone, it had a handle for the product to be held in hand which is actually not the feature of the product which are sold in the market as mobile phone.
In view of the above, the Tribunal allowed the appeal.
Case Title: M/s Proffer IT Consultancy Private Limited v. Principal Commissioner of Customs, New Delhi (ACC Import)
Case Number: Customs Appeal No. 51783 of 2022
Counsel for Appellant/ Assessee: Vishal Nath and S.C. Jain
Counsel for Respondent/ Department: Nikhil Mohan Goyal, Girijesh Kumar and Ranjan Prakash