CUSTOMS AUTHORITY FOR ADVANCE RULINGS

NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI - 400 001

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

in

Application No. CAAR/CUS/APPL/109/2023 - O/o Commr-CAAR-MUMBAI

Ruling

M/s. ViewSonic Technologies India Private Limited, (hereinafter referred to as 'the applicant' in short) filed an application for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR). The said application was received in the secretariat of CAAR. Mumbai, along with enclosures, on 22.08.2023, in terms of Section 28H (I) of the Customs Act. 1962 (hereinafter referred to as the 'Act'). The applicant is seeking advance ruling on the classification of'Computer Monitors of various Models' (hereinafter referred to as 'subject goods'), which they intend to import and eligibility of benefit under Sr. No 17 of exemption Notification No 24/2005 dated 01.03.2005 as amended. The models of Monitors intended for import are as below:

Table-1

2. Submission by the Applicant:

2.1 The applicant is a registered private limited company involved in the business of trading of computer and computer accessories/ peripherals. The applicant is intending to import "computer monitors" (model numbers and literature submitted through application) from China. The subject goods are computer monitors which are capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471. The technical characteristics of the computer monitors proposed to be imported is mentioned in the enclosed literature, which is filed along with the present application. The applicant is of the view that the subject goods are classifiable under CTH 8528 5200. The applicant is intending to claim the benefit of Nil rate of Customs Duty under exemption Notification No. 24/2005 (SL No. 17, as inserted by Notification No. 67/2016 dated 31.12.2016.) dated 01.03.2005.

2.2 The applicant is of the bonafide belief that the subject goods are rightly classifiable under 8528 5200. Therefore, the present application is being filed to ascertain the correct classification for the subject goods and the eligibility of the Notification No. 24/2005 dated 01.03.2005.

2.3 Grounds for classification:

The applicant has submitted detailed information on technical specifications and characteristics of Models proposed to be imported. The same is reiterated as below:

2.3.1 The classification of computer monitor models, which are enclosed with the present application would fall under heading 8528 5200. The tariff heading 8528 reads as follows:

"8528 MONITORS AND PROJECTORS, NOT INCORPORATING TELEVISION RECEPTION APPARATUS, RECEPTION APPARATUS EOR TELEVISION WHETHER OR NOT INCORPORATING RADIO-BROADCAST RECEIVERS OR SOUND OR VIDEO RECORDING OR REPRODUCING APPARATUS

- Other monitors:

8528 5200 -- Capable of directly connecting to and designed for use with an automatic data processing system of heading 8471 "

The subject goods are computer monitors, which are designed primarily to be used with an Automatic Data Processing System, along with additional features of HDMI port, VGA port, USB port, DVI port etc. It is submitted that the subject goods viz., computer monitors are not cathode-ray monitors and do not contain television tuner or any television reception capabilities. It is submitted that the heading 8528 5200 clearly mentions that only monitors which are capable of connecting to and designed for use with an automatic data processing system of heading 8471 shall be classifiable under the said heading. Therefore, the more appropriate CTH is 8528 5200.

2.3.2 The applicant has submitted that the Centra! Board of Excise and Customs had issued a Circular No. 33/2007- Cus dated 10.09.2007 wherein the Board had spelt out the technical features distinguishing a commuter monitor from other types of television/video monitors. Though the said Board Circular is of the year 2007 and there has been much advancement in technology, the said Circular may still be relevant to decide, with respect to certain parameters, as to whether a monitor could be considered to be a computer monitor or a video monitor. One important factor is regarding the brightness parameter. The Board has clarified that computer monitors are characterized by low emission standards (brightness of 400 CD/m2 or less). In the present case, as is evident from the enclosed literatures, the brightness of all the models of computer monitors does not exceed 400 CD/M2 and this fact can be ascertained on a perusal of the enclosed literatures. Similar, the display pitch size is generally small and usually of 0.28 mm of less. This parameter is also satisfied in all the monitors under import. However, it is pertinent to note that certain models have a display pitch of 0.3 1 mm but in any case, the display pitch is lesser than 0.41 mm, which is the specification of TV/video monitor as per Board's Circular dated 10.09.2007. The horizontal frequencies of a computer monitor are generally in the range of 15 to 155 KHZ and this parameter is also satisfied in all the computer models under consideration. TV/video monitors have a horizontal frequency in the range of 15.6 to 15.7 KHZ.

2.3.3 The applicant submits that as per the Board's Circular dated 10.09.2007, the computer monitors are marked by high resolution to enable clear and sharp text messages whereas a TV/ video monitors generally have a low resolution. In the present case, all the computer models have high resolution in the range of 1920x1080, 2560x1440, 3840x2160 and 1,366x768. Therefore, on this ground also the subject monitors have to be considered as a computer monitor.

2.3.4 The applicant quotes that the HSN Explanatory Notes to the heading 8528 states as follows:

A) MONITORS CAPABLE OF DIRECTLY CONNECTING TO AND DESIGNED FOR USE WITH AN AUTOMATIC DATA PROCESSING MACHINE OF HEADING 84.71

This group includes monitors which are capable of accepting a signal from the central processing unit of an automatic data processing machine and provide a graphical presentation of the data processed. These monitors are distinguishable from other types of monitors (see (B) below) and from television receivers.

The monitors of this group may be characterized by the following features:

(i) They usually display signals of graphics adaptors (monochrome or colour) which are integrated in the central processing unit of the automatic data processing machine;

(ii) They do not incorporate a channel selector or video tuner:

(iii) They are fitted with connectors characteristic of data processing systems (e.g.. RS-232C interface, DIN, D-SUB, VGA, DVI HDMI or DP (display port) connectors);

(iv) The viewable image size of these monitors does not generally exceed 76 cm (30 inches);

(v) They have a display pitch size (usually smaller than 0.3 mm) suitable for close proximity viewing;

(vi) They may have an audio circuit and built-in speakers (generally, 2 watts or less in total);

(vii) They usually have control buttons situated in the front panel;

(viii) They usually cannot be operated by a remote control:

(ix) They may incorporate lilt, swivel and height adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic design characteristics to facilitate prolonged periods of viewing at close proximity to the monitor;

(x) They may utilize wireless communication protocol to display data from an automatic data processing machine of heading 84.71.

It is submitted that all the monitors under consideration match the above specifications and therefore, even as per the IISN Explanatory Notes, the subject monitors are of a kind that is used exclusively and primarily with an automatic data processing machine.

2.3.5 It is submitted that in the case of In Ke: Sharp Business System (India) Pvt. Ltd, reported in 2022 (381) ELT 565 (A.A.R-Cus-Del), the Hon'ble Customs Authority for Advance Rulings, New Delhi was called upon to decide the classification of LCD monitors and the Hon'ble Authority held that the monitors containing SD card slot, D-sub input, DVI-D input/output, HDMI input and USB port would be classifiable under heading 8528 5200. It is further submitted that in the case of In Ke: Gurmat Impex and Services reported in (2023) 6 Centax 1 16 (A.A.R-Cus-Mum), the Hon'ble Customs Authority for Advance Ruling, Mumbai was called upon to decide the classification of six models of ViewSonic Brand LCD monitors, which are also subject matter of the present application. After studying the technical parameters, the Hon'ble Authority came to a conclusion that the monitors are rightly classifiable under heading 8528 5200 and further held that the importer would be eligible to avail the benefit of duty exemption under SI. No. 17 of notification No. 24/2006-Cus dated 01.03.2005. The said advance ruling is squarely applicable to the present case.

2.3.6 The applicant also places reliance on the decision of the Hon'ble CESTAT in the case of Commissioner of Customs, Chennai-I Vs. Omni Gate Systems reported in 2018 (363) ELT 252 (Tri-Chennai) in support of the contention that the computer monitors proposed to be imported are rightly classifiable under CHI 8528 5200.

3. Port of Import:

The applicant intends to import the said goods through O/o The Commissioner of Customs Chennai 11 Commissionerate, Custom House 60 Rajaji Salai Chennai 600 001. Accordingly, comments from the jurisdictional Commissioner of Customs, Chennai II Commissionerate, was invited immediately after receipt of applications on 05.09.2023. Subsequently, reminder letters dated 21.12.2023 and 05.01.2024 had been issued.

4. Details of Personal Hearing:

4.1 A Personal hearing in the matter was conducted on 31.01.2024 at 12:30 PM. The applicant was represented by Sh. Hari Radhakrishnan, Ld. Advocate. He reiterated their contention submitted in their written application. He explained that the subject import goods are computer monitors and not TV/Video Monitors and compared it with the comparison chart associated with the Circular No. 33/2007- Cus dated 10th September 2007 in the support of his arguments. He explained that there is certain and slight variation updation in a couple of parameters and this is due to the advancements the technology and normally available with the general import practice. He also cited a ruling of CAAR Mumbai in the matter of M/s. Gurmat Impex and Services 2023(6) CENTAX 116 (AAR Cus Mumbai) on similar matter and expressed that the subject goods merit classification under CTH 85285200 and accordingly the same eligible for exemption under Sr. No 17 of Notification No. 24/2005-Cus dated 01.03.2005. Nobody appeared for the PH from the department side either physically of through e-Hearing.

4.2 Sh. Hari Radhakrishnan, Ld. Advocate vide their letter dated 19.02.2024 has submitted additional submission. A clarification regarding the aspect ratio and bandwidth of the products has been submitted as below:

4.2.1 It is submitted that all the models of the product in question has the aspect ratio of 16:0. During the hearing, a query was raised referring the Circular No. 33/2007-Cus dated 10.09.2007, wherein the specification for computer monitor was prescribed as 16110 and for video monitors as 16:9. At the outset, it is submitted that the parameters or specifications provided in the said Circular was based on technology prevailed during the said period i.e. 2007. Il is pertinent to mention that there is advancement in technology and 16:0 has become the standard aspect ratio of the computer monitors globally.

4.2.2 It is submitted that the ''Display Search", a Company involved in display market research released a report advice on July 1, 2008 that the display market is driving towards 16:9 aspect ratio for laptops and monitors and 67% of the LCD panels for monitors would shift from 16:10 to 16:9 by 2012. Copy of the webpage is enclosed as Annexure - A. further, an article was published in HandWiki regarding 16:9 aspect ratio, which states that 16:9 ratio became the commonly used aspect ratio in 2011. Copy of the said webpage is enclosed as Annexure - B. In the recent times, almost all the laptops and monitors has an aspect ratio of 16:9 and the same can be evidenced from the specification of monitors sold out in c-commerce websites and in stores as well. Therefore, it is submitted that 16:9 has become the standard aspect ratio across the world and therefore, the same may be an impediment in classifying the products in question as Computer Monitors.

4.2.3 With respect to bandwidth of the products in question, we have obtained a declaration from the Applicant Company reflecting the bandwidth details of the product in question. Copy of the declaration dated 15.02.2024 is enclosed as Annexure - C. The Circular No. 33/2007-Cus dated 10.09.2007 states that the bandwidth for Computer Monitors should be more than 15 MHz and for TV/Video Monitors, it should be less than 6 Mhz. Upon perusal of the declaration of the applicant dated 15.02.2024, it can be understood that all the products in question has a bandwidth of more than 100 MHz and satisfies the condition prescribed in the Circular dated 10.09.2007.

4.3 Sh. Hari Radhakrishnan, Advocate vide their letter dated 13.03.2024 has submitted an additional submission. Sh. Gokulraj, Ld. Advocate appeared for hearing on behalf of applicant on 28.03.2024 and informed to arrange a demonstration of the monitor to ascertain the claim of the applicant. Further, the applicant vide their letter dated 16.04.2024 has submitted details of the ports and specification of the monitors. The additional submission dated 13.03.2024 has been taken on record.

4.4 The representative of the Importer also demonstrated two models of the monitors in the subject applications i.e. XG2431 and VP2468a on April 10, 2024. The demonstration was made to show that the availability of the USB ports does not change the nature of the monitors and further, the subject monitors are functional only by connecting to an Automatic Data Processing machine. Pursuant to the same, the Applicant was directed to submit the functionality of all the ports in the subject monitors. In compliance with the same, the Applicant has spelt out the ports available in the subject monitors and their respective function in their letter dated April 16. 2024. Vide said letter the applicant has informed that these monitors have HDMI Port Mini HDMI Port, Display Port (IN & Out), USB (Type A, B, C). The applicant has not informed about the gaming module and that how the gaming modules are to be connected to the monitors. However, it is observed that connectability to these ports with Non ADP machine is not categorically denied.

5. Reply from jurisdictional Commissionerate:

5.1 Jurisdictional Commissionerate through their letter dated 18.03.2024 issued vide F. No. CUS/APR/APPL/44/2024-GR 5A has inter-alia stated that:

i. The subject monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 84.71, are to be declared under heading 85285200. From the technical literature for the list of monitors, it is observed that the monitors are having connectors HDMI, VGA, USB etc, which as per Circular 33/2007-Cus dated 01.09.2007, are categorized as computer monitors that have the capability of connecting to and designed for use with an automatic data processing machine of heading 84.71. As per the technical literature provided by the applicant the listed model, have VGA and I or HDMI connectivity and can be classified under 85285200.

ii. This Commissionerate is of the view' that the subject goods are not eligible for exemption under SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005 as amended by Notification No. 67/2016-Cus dated 31.12.2016. as the subject goods have HDMI connectors and USB connectors in all the models, thereby having options to connect with Non-ADP machines as well; and are NOT of a kind used solely or principally used in an automatic data processing machine.

6. I have considered all the materials placed before me in respect of the subject goods for which an advance ruling has been sought. I have gone through the case details, written submissions, reliance placed on the decision of the Hon'ble CESTAT in the case of Commissioner of Customs, Chennai-I Vs. Omni Gate Systems reported in 2018 (363) ELT 252 (Tri-Chennai) in support of the contention that the computer monitors proposed to be imported are rightly classifiable under CTH 8528 5200, In Re: Gurmat Impex and Services (2023) 6 Centax 116 (A.A.R-Cus-Mum), and CBIC Circular No. 33/2007-Cus. dated 10.09.2007. The present case needs to be deliberated upon in light of legal framework governed by the Customs Tariff Act, 1975, specifically Chapter 84 & 85. its corresponding Chapter notes, supplementary notes and relevant HSN explanatory notes. Now, I proceed to pronounce ruling on the issue, on basis of information available on record. The subject goods for which advance ruling has been sought, its technical specifications, characteristics, functions etc. has been broadly mentioned in Table-2. The issue involved for advance ruling is, if the subject goods namely models of computer monitors as detailed in Table-1 of Para-1 are classifiable under CTl .8528 52 00 of the first schedule to the Customs Tariff Act, 1975 and whether they would be eligible to avail benefit of duty exemption under Sr. No. 17 of Notification No. 24/2005-Customs. dated 01.03.2005, as amended.

7.1 I find that the subject goods are enabled with HDMI port, VGA port. USB port. DVI port etc. The viewable image size of the subject goods is either 16, 24 or 27 inch. Similarly, to ensure suitability for close proximity viewing, the display pitch size of subject goods is set below' 0.3 mm, except for VX2728, VX2728J, VX2776-sh, VX2776-smhd and VX2779-HD-PRO model which is al 0.311. The Emission standards for the subject goods is low (brightness of 400 CD/m2 or less), as they are designed for close proximity over a prolonged period of time like desktop monitors, while monitors designed for other uses have a high emission standard as they are to be viewed at a distance. The subject goods have physical .control buttons on front panel in all the models and have various ergonomic features such as tilt, swivel, height adjusting mechanism, glare free surfaces and flicker free display. They are compatible in utilizing wireless communication protocol, with additional accessories and are capable of accepting signal from CPU of an ADPM and providing a Graphical presentation of the data processed. Further, it is claimed by the applicant that, they are not incorporated with technical features as seen in TV/Video Monitors like built-in USB drives, SD Card, touch screen capability, television tuner, channel selector, video tuner and remote control facility. The applicant has contended that the subject goods have all the above characteristics in the above computer monitors and they are rightly classifiable under Chapter heading 85285200 of Customs Tariff Act, 1975 and not under 8528 59 00, and attract eligibility benefit of exemption under Sr. No. 17 of Notification No. 24/2005-Custorns, dated 01.03.2005, as amended.

7.2 I find that the applicant has drawn attention to the CBIC Circular no. 33/2007 dated 10.09.2007, wherein inter alia, it has been categorically stated that due to HS 2007 changes, all types of monitors and projectors which are solely or principally used with an ADP machine is covered under the sub-headings 8528 41 (Cathode Ray Tube Monitors), 8528 51 (Other types) and 8528 61 (Projectors) [erstwhile tariff heading ] and are extended with exemption of customs duty vide Sr. No. 17 of notification No. 24/2005-Customs dated 1-3-2005. Further the circular provides a comparative chart on technical features, distinguishing computer monitors from other types of Television/Video monitors that could be used as guidance for assessment, examination of the said goods. As illustrated, some of the technical features that distinguish Computer monitors are that they do not incorporate a TV Tuner Card instead have DVI and/or mini D-Stub connectors to connect to the CPU; that they have few ports like VGA, DVI, USB to receive signals from CPU or storage devices; that they receive RGB signals and do not possess separate audio circuits,; that they are characterized by low emission standards and have various ergonomic features such as swivel, till mechanism, glare free and flicker free surfaces to enable close proximity and prolonged viewing; that the display pitch size is usually 0.28 mm or less and the horizontal frequency is 15 to 155KHZ; that they do not contain components like audio amplifying system, remote function, control panel functions, selection panel with buttons for volume, channel etc., on display unit, wall mounting facility.

7.3 On examining the inclusions and exclusions of features and specifications as stated in para 7.1 with the clarification on technical features as provided in the CBIC Circular no. 33/2007 dated 10.09.2007. 1 find that broadly the subject goods have the essential characteristics to be classified as computer monitors, except that the features of HDMI port or speakers, that are present in the subject goods are not specified in the Circular. In the instant case, however. I agree with the applicant's contention that technology has been ever evolving, and the presence of HDMI port and sound capabilities through speakers docs not negate the principal function of the subject goods in determining the classification of the subject goods.

8.1 It is pertinent to mention that the principles for classification of goods are governed by the Harmonized Commodity Description and Coding System (Harmonized System or HSN) and the General Rules for Interpretation specified thereunder. In terms of GIR Rule 1, "'Hiles 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." The applicant has stated that the subject goods are classifiable under CTH 8528 as Monitors capable of directly connecting to and designed for use with an Automatic Data Processing System (hereafter known as ADPS) of heading 8471. Accordingly, I proceed to verify the classification of goods under sub heading 8528 52 00, as requested by the applicant.

8.2 Chapter heading 8528 stipulates that, "Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus". This heading is further subdivided into four I-dash subheading. These subheading covers, inter alia, monitors, that are sub-categorized as ""cathode-ray tube monitors" and, ""other monitors". The sub heading, "other monitors " under 8528 52 00 states, "Capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471". Further, in terms of HSN Explanatory Notes to heading 8528, ""This group includes monitors which are capable of accepting, a signal from the central processing unit of an automatic data processing machine and provide a graphical presentation of the data processed. These monitors are distinguishable from other types of monitors and from television receivers. The monitors of this group may be characterised by the following features:-

i. They usually display signals of graphics adaptors (monochrome or colour) which are integrated in the central processing unit of the automatic data processing machine;

ii. They do not incorporate a channel selector or video tuner;

iii. They are fitted with connectors characteristic of data processing systems (e.g., RS-232C ' interface, DIN, D-SUB, VGA, DVI, HDMI or DP (display port) connectors);

iv. The viewable image size of these monitors does not generally exceed 76 cm (30 inches);

v. They have a display pitch size (usually smaller than 0.3 mm) suitable for close proximity viewing;

vi. They may have an audio circuit and built-in speakers (generally, 2 watts or less in total);

vii. They usually have control buttons situated in the front panel:

viii. They usually cannot be operated by a remote control;

ix. They may incorporate tilt, swivel and height adjusting mechanisms, glare-free surfaces, Flicker-free display, and other ergonomic design characteristics io facilitate prolonged Periods of viewing at close proximity to the monitor;

x. They may utilize wireless communication protocol to display data from an automatic data processing machine of heading 84.71.

8.3 I find that the applicant has acknowledged availability of all the above mentioned features in their subject goods. Thus contending that the subject goods are monitors which are capable of accepting signal from central processing unit of an automatic data processing machine and providing graphical presentation of data processed.

8.4 Chapter 8471 covers, "Automatic data processing machines and units thereof magnetic or optical readers, machines for transcribing data onto data media in coded form and machines processing such data, not elsewhere specified or included."

8.5 Paragraph 6(D) inter alia specifies, that heading 8471 does not cover. "Monitors, not incorporating television reception apparatus" when presented separately. And paragraph 6 (E). states that, "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.

8.6 I find that as per paragraph 6(D) & 6(E), Monitors, not incorporating television reception apparatus when presented separately, cannot be classified under Chapter heading 8471 and have to be classified in the headings appropriate to their respective functions. Accordingly, by virtue of terms of the headings, relative Chapter Notes and HSN Explanatory notes, I find that the subject goods meet essential conditions to merit classification under Chapter sub heading 8528 52 00 as, "Monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471".

8.7 I find that the applicant has demonstrated the functioning of a model viz. XG2431 selected as per their choice wherein the subject monitor had been connected to the desktop but ongoing through the applicant's website it was observed the models has following overview on their own website:-

Engineered for gaming the ViewSonic XG2431 features the perfect blend of speed, control and color. An ultra-smooth 240Hz display pushes FPS gaming into new territory, enabling games to run at higher frames for superior graphics performance. AMD FreeSync^TM Premium synchronizes the monitor and GPU outputs, eliminating screen tearing and lag. Fast-IPS technology combines rich colors with VESA Display HDR, better contrast, and wide viewing angles, with up to 4X response times compared to traditonal panels. The <0.5ms MPRT response lime allows every input to be faster and more precise. Flexible connectivity via DisplayPort and two HDMI ports make connections to other peripherals or high-end graphics cards for gaming a breeze The XG2431 is also equipped with ViewSonic's exclusive View Mode^TM presets, which offer user-customized game modes, including FPS, RTS and MORA game settings.

These aspects of the particular model are never revealed by the applicants in their application neither during the course of Personal hearing nor in their additional Submissions.

9. With regard to the applicability of the Notification benefit under Sr. No 17 of Notification No. 24/2005 dated 01.03.2005 as amended, the monitors as mentioned in Table-2 were searched as mentioned above on the open web. As per the Applicants' website a few of such other monitors have been found to be mentioned as "Gaming Monitors". It has been clearly displayed on the website that such monitors are to be used for the premium gaming experience. The below details have been found from the applicant's website.

it is evident that such monitors are gaming monitors designed for specific use of better gaming experience having features as mentioned in the overview and specification sheet.

10.1 Whereas the tariff heading 8528 more particularly 85285200 (Others) reads as follow:

"8528 MONITORS AND PROJECTORS, NOT INCORPORATING TELEVISION RECEPTION , APPARATUS, RECEPTION APPARATUS FOR TELEVISION, WHETHER OR NOT INCORPORATING RADIO-BROADCAST RECEIVERS OR SOUND OR VIDEO RECORDING OR REPRODUCING APPARATUS

- Other monitors:

8528 5200 -- Capable of directly connecting to and designed for use with an automatic data processing system of heading 8471

As far as all the models in question (including the two elaborated above) are concerned the applicant is silent and did not categorically deny that the ports other than USB viz. HDMI. VGA, DVI etc. can not in any manner be used for the purposes other than those of satisfying the condition under Sr. No 17 of the exemption Notification No. 24/2005-Cus dated 01.03.2005 as amended.

For the ease of reference provision contained in the Sr. No 17 of Notification No 24/2005-Cus dated 01.03.2005 is reproduced as below:

17. All goods of a kind solely or principally used in an automatic data processing system of heading 8471.

On going through the wordings used in the exemption Notification it can safely deduced that there may be Iwo sets of systems that can be used in the said import goods/monitors. One which can be an Automatic data processing system of heading 8471 and the other Non ADP machine/system. In the instant case it appears that the subject monitor can substantially function with Non ADP machine as well. The Jurisdictional Commissionerate also has contended the same.

10.2 To support this view, the various sources available on the open web can be referred to. The usage of different kind of ports can be seen which are precisely enumerated below:

10.2.1. HDMI: HDMI provides an interface between any audio/video sources such as Set Top Box, DVD player or AV receiver and audio and / or video monitor such as a digital television over a single cable. It allows to send high resolution digital video, theatre quality sounds and. device command. Precisely it is used on HD signals for transferring both high definition audio and video over a single cable. It can also support audio return channel which sends sounds from TV Tuner to the receiver, in contrast with normal computer cable /port. TV/HDMI ports also enable the TVs to connect the other devices transferring high quality audio and video. It can also connect a gaming device (in fact some models as illustrated above also de-facto gaming devices), home theatre etc. High Definition multimedia interface (HDMI) is data transmission standard device that connects a data source such as CPU or a set top box to an output device such as television, projector, desktop monitor, laptop, speakers etc. It provides an interface between any audio Video sources such as set top box, DVD Player or A/V receiver. Audio Video Monitor such as digital television etc.

HDMI is one of the most useful and most common port. The HDMI port can be used for video, audio, computers as well as in Smart TV. The devices that can be associated/connected with these HDMI ports may be as follows:-

i. Modern Game Console

ii. Media Players

iii. DVRS

iv. Sound Systems

v. Computers

vi. Streaming Devices

10.3 From the wording used in the Sr. No. 17 of the exemption Notification No. 24/2005-Cus dated 01.03.2005 it is quite clear and tin ambiguous that only those Computer Monitors qualify for exemption when solely or principally used in an ADP System of heading 8471. Contrarily, in the instant case the subject monitors can also be connected with a number of other electronic devices like modern game console, Media players, DVRS, sound systems, streaming devices etc. along with computers (ADP Machine). HDMI are used both for Video and audio. Streaming device like a ROKU or Amazon Fire TV Stick can be easily plugged in these subject monitors through HDMI ports. Such modern game console, streaming devices etc. cannot be called as an ADP machines or Part of an ADP Machine.

It is further observed that the other ports namely VGA, DVI, USB can also be used to connect such monitors lo a Non-ADP Machines cither.

10.4 The wordings used in the tariff heading for the purpose of classification of the subject goods and lo avail exemptions thereon under Sr. No 17 of the exemption Notification No. 24/2005- Cus dated 01.03.2005 are on different footings and cannot be said to be one and the same. After studying the characteristics and technical specification it can be seen that these monitors are equipped with advance features like HDMI, VGA, DVI and USB etc. that can substantially be used for other than the use than that of an ADP Machine. The Hon'ble Supreme Court in its judgment dated 05.05.2021 in casc of Civil Appeal No. 3123 of 2020 has observed as below:-

10. In the 183rd Report of the Law Commission of India, Justice M. Jagannadha Rao observed that a statute is a will of legislature conveyed in the form of text. It is well settled principle of law that as a statute is an edict of the legislature, the conventional way of interpreting or construing the statute is to see the intent of the legislature. The intention of legislature assimilates two aspects. One aspect carries the concept of 'meaning' i.e. what the word means and another aspect conveys the concept of 'purpose ' and 'object ' or 'reason ' or 'approach ' pervading through the statute. The. process of construction. there fore, combines both liberal and purposive approaches. However, necessity of interpretation would arise only where a language of the statutory provision is ambiguous, not clear or where two views are possible or where the provision gives a different meaning defeating the object of the statute.

10.4.1 It is to be underlined that the wording and language for classification of goods under CTl 85285200 and applicability of exemption benefit against the said notification are differently used. In other words, for satisfying the classification under CTl 85285200 two aspects are required- 1st to be capable of directly connectable to an ADP machine and the second is to be designed in a manner for use with an ADP machine of CTH 8471, whereas for getting exemption benefit it must also satisfy the third aspect that these goods should solely oi principally be used in an ADP System of CTH 8471 and not otherwise.

10.4.2 The Hon'ble Supreme Court in a catena of Judgment has held that while interpreting the provision of a statute, the textual interpretation should be matched with contextual one. A statute is an edict of the legislature and the language employed in a statute is the determinative factor of legislative intent. Similarly, it is also observed by Hon'ble Supreme Court in a number of cases that it is a cardinal principal of the interpretation of a statute that a words of a statute must be understood in their natural, ordinary or popular sense and constructed according to their grammatical meaning unless such constitution leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary.

10.4.3 Hon'ble Supreme Court vide its judgment in case of Civil Appeal No. 3327 of 2007 as reported in 2018 (361) E.L.T. 577 (S.C.) (Commissioner ofCus. (Import), Mumbai vs. Dilip Kumar & Company) has ordered as verbatim:-

41. After thoroughly examining the various precedents some of which were cited before us and after giving our anxious consideration, we would be more than justified to conclude and also compelled to hold that every taxing statute including, charging, computation and exemption clause (at the threshold stage) should be interpreted strictly. Further, in case of ambiguity in a charging provisions, the benefit must necessarily go in favour of subject/assessee. but the same is not true for an exemption notification wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State.

52. To sum up, we answer the reference holding as under -

(1) Exemption notification should be interpreted strictly: the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.

(2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue.

10.5 I also find that in the case of In Re: Sharp Business System (India) Pvt. Ltd. (Relied upon by the Applicant in the application) reported in 2022 (381) ELT 565 (A.A.R-Cus-Del), the Customs Authority for Advance Rulings, New Delhi while upholding the classification under CTI 85285200 had denied the benefit under Sr. No 17 of Notification No. 24/2005-Cus., as amended on account of features available in the monitors. The applicant failed to substantiate their contention that the various ports available in such monitors (e.g. HDMI) can only be connected to an ADP Machine and not otherwise. Similarly, connectability to these ports with Non-ADP machine is not categorically denied in their port functionality letter dated 16.04.2024. Here, I concur with the views expressed by the Jurisdictional authorities as stated in Para 5.1 (i & ii).

10.6 Further some of the monitors for which the advance ruling has been sought appear to be Gaming monitors for better gaming experience. In no way it can be said that it is the intent of the legislature to extend exemption notification benefit to such Gaming Monitors/Consoles and streaming devices etc. which are not an ADP machine.

11. In view of these facts, I find that all the models of computer monitors as detailed in Table-1 of Para-1 and covered under present application are classifiable under CTI 8528 52 00 of the first schedule to the Customs Tariff Act, 1975 however, they would not be eligible to avail benefit of duty exemption under Sr. No. 17 of Notification No. 24/2005-Customs. dated 01.03.2005, as amended.

12. I rule accordingly.

(P K Rameshwaram)

Customs Authority for Advance Rulings, Mumbai