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/141/2023 - O/o Commr-CAAR-MUMBAI

Ruling

M/s. Audio Distribution House Pvt. Ltd. (hereinafter referred to as 'the applicant') filed an application for advance ruling before the Customs Authority for Advance Rulings, Mumbai (('AAR, in short). The said application was received in the secretarial of the CAAR, Mumbai on 06.1 1.2023, along with its enclosures 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 Data Projectors | Model Names, (i) AZX360ST (ii) AZW500 (iii) AZH500 (iv) AZH360ST (v) AZH430 (vi) AZH460 (vii) AZH460ST (viii) ZH507] (hereinafter referred to as The subject goods') proposed to be imported. The applicant is also seeking applicability of exemption benefit in terms of SI. No. 17 of Notification No. 24/2005-Cus. dated 01.03.2005 as amended on import of above said Data Projectors.

2. Submission by the Applicant:

2.1 The applicant is a registered private limited company involved in the business of trading. The applicant is also registered under the GST bearing registration No. 27AAOCA7734L1Z2. The applicant is intending to import ''Data Projectors [Model Names (i) AZX360ST (ii) AZW500 (iii) AZH500 (iv) AZH360ST (v) AZH430 (vi) AZH460 (vii) AZH460ST (viii) ZH507 ] (herein alter referred as 'subject goods), from China.

2.2 The applicant has informed that the subject goods are data projectors used in Schools, Business Meetings and conferences, and are principally meant for use with an Automatic Data Processing System (ADPS). They are designed to function in places like conference rooms, business meetings, financial institutions, etc., with connectors matching that of PC. indoor or outdoor projection capability. In other words, the subject goods are designed in such a way that enables them to function in well-lit places. The applicant is of the view that the subject goods are classifiable under CTH 8528 6200. The applicant is intending to claim the benefit of Nil rate of Customs Duty under exemption Notification No. 24/2005 (SI. No. 17, as inserted by Notification No. 67/2016 dated 31.12.2016.) dated 01.03.2005.

2.3 The applicant is of the bonafide belief that the subject goods are rightly classifiable under 8528 6200. 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

3. Interpretation of Law by the Applicant:

3.1 The classification of "Data Projectors [Model Names (i) AZX360ST (ii) AZW500 (iii) AZI 1500 (iv) AZH360ST (v) AZH430 (vi) AZI 1460 (vii) AZI 1460ST (viii) ZH507] fall under chapter 8528. It is as follows:

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

- Projectors

8528 6200 -- Capable of directly connecting to and designed for use with an automatic data processing system of heading 8471 "

The subject goods are data projectors, which are designed primarily to be used with an Automatic Data Processing System, along with additional features of HDMI port. Video port, etc. It is submitted that the heading 8528 6200 clearly mentions that only projectors 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 6200

3.2 It is submitted that the products in question, namely Model Names - Model Names (i) AZX360ST (ii) AZW500 (iii) AZH500 (iv) AZH360ST (v) AZH430 (vi) AZH460 (vii) AZH460ST (viii) ZH507. The model AZX360ST has a native resolution of 1024*768 (XGA). The model AZW500 has a native resolution of 1280x800 (WXGA). The models AZH500, AZH360ST. AZI 1430, ZH460, AZH460ST, ZH507 have a native resolution of 1920x1080 and also supports computer signal upto WUXGA. The terms WUXGA (Widescreen Ultra Exira Graphics Array) refers to a computer display standard. It is relevant to note that the resolution of home theatre projectors or video projectors is 4K UHD (3840*2160). Therefore, it is apparent that the projectors in question are not of a kind used as home theatre projectors or video projectors, even going by the resolution output. In addition, the native aspect ratio of the home theatre/video projectors is generally 16:9, whereas the native aspect ratio of the products in question is 4:3. However, the said aspect ratio would be enhanced to 16:9 or 16:10. For the projects of the model AZH the aspect ratio can be enhanced to 16:9 alone. The default ratio is however, 4:3 and the enhancement capability is only superficial. The literatures of all the eight models are enclosed to the CAAR-I application. All these Models have the light type of "laser phosphor" which is a Laser Light and this is the new technological development in the Projector Technology, with a Laser Phosphor, the projector light is different in that it uses just one blue layer. Laser projector has better performance in terms of brightness. A projector with a laser light source makes excited particles glow under the action of radiation because of the photoelectric effect. A laser projector has very high brightness.

3.3 Laser Projector:

LASER. (Light Amplification by Stimulated Emission of Radiation) or laser technology has become part of regular life. A laser projector is a projector that uses a laser lamp instead of a Light-Emitting Diode (LED) lamp or halogen lamp in order to create those bright projections. The main visual benefit of a laser projector is that laser light sources offer better color accuracy often called a wider color gamut. In addition to the colors themselves, laser projectors offer better brightness uniformity and lower brightness decline over the lifetime of the projector, the beam is optically easy to capture and focus at the screen with only minor losses. No spatial light modulator or internal screen is needed. A laser projector, with primary-colored lasers, which are diffused before hitting a chip and then focused by multiple lenses. This technology produces vibrant, high-quality images. Laser projectors produce crisper, more detailed images than traditional projection systems. This is due to the fact that lasers create a more focused light beam, which results in less image distortion. Lasers provide the most impact out of any type of projector especially when projected on large screens. The tight beams can give off higher resolution images with greater color saturation than other types of projection systems. Since this Laser Technology in lighting, create a more focused light beam, which produces high-quality images and less image distortion, the Dynamic Contrast Ratio of these Data Projectors are 3,00,000:1.

3.4 It is submitted that though the contrast ratio in respect of all the above models of the data projector in question is in the range of 3.00,000:1. which may be higher than the traditional projector such as Lamp Projector or LED projector, the projector in question will not cease to be classified as a data projector. It is submitted that with advancement in the technology the efficiency and performance of the products is bound to go up and the law requires that the tariff entries are to be interpreted in line with the technological advancement. The Hon'ble Supreme Court in the case of Collector of Customs &Central Excise V. Lekhraj Jessumal & Sons reported in 1996 (82) E.L.T. 162 (SC) as held that words in the traffic schedule need to be interpreted by considering the rapid development of technology as the industry cannot be static, The Hon'ble Supreme Court held as follows:-

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

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

Applying the above proposition to the subject data projectors, it can be safely concluded that the projector in the question are data projectors since they have a low native resolution and low aspect ratio compared to the video projector, The increased contrast ratio will not lead to the classification of the projectors in question as a video projector.

3.5 The applicant is placing reliance on the decision in Epson India Pvt. Ltd. V. Commissioner reported in 2019 (366) ELT 847 (Tri-Chennai). In the afore-said decision, the Hon'ble Tribunal. Chennai, had held that the projectors which are principally used for data projection by being connected to either a laptop or a desktop computer shall be eligible to be classified under CTH 8528 6100 (erstwhile tariff heading for projectors capable of directly connecting to and designed for use with an automatic data processing system of heading 8471). The said decision has already been confirmed by the Hon'ble Supreme Court in Commissioner of Customs V. M/s. Epson India Pvt. Ltd. reported in 2019 (366) ELT AI 73 (SC).

3.6 The Hon'ble Tribunal, Mumbai, has held, in Commissioner of Customs V. Vardhaman Technology Pvt. Ltd., reported in 2014 (301) ELT 427, that the presence of video port, S-video port. HDMI. RCA etc. in the data projectors were insignificant, for the purpose for classification, when the primary function is to project data by connecting to an Automatic Data Processing System. In addition, the afore-said decision has been followed by the Hon'ble Tribunal, New Delhi, in M/s. Casio India Co. Pvt. Ltd. Vs. Commissioner of Customs, New Delhi, vide Final order dated 55283/2016.

3.7 It is also submitted that the principal bench of the Hon'ble CESTAT in the case of Sony India Pvt. Ltd. V. Commissioner of Customs and Central Excise, New Delhi reported in 2019 (3 70) ELT 1774 (Tri-Del) has held in Para No. 35 and 36, 40 and 41 as follows:-

"35. The Commissioner has, notwithstanding, the judgments of the Supreme Court and the decisions of the Tribunal on this issue, concluded that the colour data projectors imported by Sony India would fall under 8528 69 00. This is very disturbing and a serious note needs be taken of such a deviation as it is expected of Adjudicating Officers to follow the binding decisions. At this stage, it also needs to be remembered that the Supreme Court, while dismissing the Civil Appeal filed by the Department to assail the order passed by the Tribunal in M/s. Epson India Pvt. Ltd., had also observed that there was no reason to deviate from the view expressed by the Tribunal which had followed the earlier decisions of the Tribunal in the matter in issue and the decisions had also attained finality, including on account of the dismissal of the two Civil Appeals by the Supreme Court.

36. The reason assigned by the Commissioner for not following the binding judgments of the Supreme Court and the decisions of the Tribunal is that the judgment of the Supreme Court in Dilip Kumar has rendered the earlier judgments of the Supreme Court and the decisions of the Tribunal as "not relevant and legally tenable". The findings of the Commissioner, on this aspect, have been reproduced in paragraph 9 of this Order, but it is considered appropriate to restate the findings in short and they are as follows :

(i) The judgments of the Supreme Court and the decisions of the Tribunal relied upon by the Appellant are based on the ratio of judgment of Supreme Court in Sun Export Corporation, Bombay v. Collector o f Customs, Bombay [1997 (6) SCC 564 = 1997 (93) E.L.T. 641 (S.C.)

(ii) In Sun Export, the Supreme Court observed that any ambiguity in a tax exemption provision or notification must be interpreted in f avour of the assessee;

(iii) The Constitution Bench of the Supreme Court in Dilip Kumar observed that an exemption notification should be interpreted strictly and when there is ambiguity in an exemption notification, the benefit of such ambiguity must be interpreted in favour of the Revenue;

(iv) The Supreme Court in Dilip Kumar overruled its earlier decision in Sun Export. Thus, all the judgments of the Supreme Court and the decisions of the Tribunal relied upon stand overruled and "are not relevant and legally tenable and

(v) The Appellant is, therefore, not entitled to the benefit of the exemption notification.

40. All that the Commissioner had to first examine was the classification of colour data projectors imported by the Appellant under 8528 61 00 as projectors of a kind "solely or principally" used in an ADP system of Heading 8471 or under 8528 69 00. This issue stood concluded in favour oj the Appellant as the Tribunal had in clear terms held that the colour data projectors would fall under Heading 8528 61 00, and at least two Civil Appeals filed by the Department to assail the decisions of the Tribunal had been dismissed by the Supreme Court.

41. It is, thereafter, that the Commissioner had to examine whether the colour data projectors would be entitled to the benefit of the Notification dated 1 March, 2005. This Notification automatically grants exemption from payment of the whole of the Customs duty if the product is covered by the description specified in Column (3). All goods falling under 8528 61 are specified in Column (3) of the Table. It is only when there is any ambiguity in the Exemption Notification, that the Notification is required to be interpreted in favour of the Revenue. This is also what was noted by the Commissioner while referring to the judgment of the Supreme Court in Dilip Kumar for the Commissioner did note that the said judgment of the Supreme Court was in relation to ambiguity in an Exemption Notification. There is no ambiguity in the Exemption Notification dated 1st March, 2005 and indeed none has been pointed out by the Commissioner in the impugned order. Reliance placed by the Commissioner on the judgment in Dilip Kumar is, therefore, misplaced, and it appears that reliance was placed only to overcome the binding decisions. ".

3.8 The applicant submits that for a similar model of projector, namely, Optoma SA520, this Hon'ble Authority, vide Ruling No. CAAR/Mum/ARC/70/2021 dated 20.12.2021 has ruled that the projector is classifiable under CTH 8528 6200 and is eligible to avail the benefit of SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005. The said Ruling is squarely applicable to the present case. A similar view was taken by this Hon'ble Authority in its Ruling No. CAAR/Mum/ARC/63/2021 dated 28. 10.2021. further, it is also noted by the Authority in its Ruling No. CAAR/Mum/ARC/16/2022 dated 08.06.2022 and in Ruling No. CAAR/Mum/ARC/04/2023 dated 01.02.2023

3.9 From the above decisions of the Hon'ble CESTAT, some of which have been affirmed by the Hon'ble Supreme Court and from the Advance Ruling mentioned above, it is apparent that the classification of color data projector has attained finality and there is no room for any doubt with regard to the fact that the goods are classifiable under 8528 6200 and is entitled to avail the benefit of the benefit of SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005.

3.10 in view of the above the applicant has requested ruling with respect to the following:-

i. The classification of the subject goods under CITI 8528 6200.

ii. The eligibility of SI. No. 17 of exemption notification 24/2005 dated 01.03.2005 for the subject goods.

4. Port of Import and reply from the jurisdictional Commissionerate:

4.1 The applicant intends to import the said goods through The Commissioner of Customs, Nhava Sheva-V, JNCH, Tai Uran, Accordingly, comments from the jurisdictional Commissioner of Customs. Nhava Sheva-V were invited vide this office letter dated 21.11.2023. Later reminder letters dated 15.12.2023 & 12.02.2024 were also forwarded.

4.2 The jurisdictional authorities vide their letter dated 29.12.2023 issued from F.No. S/26-Misc-1 194/2023-24/Grp VA/JNCH has commented as below:

4.2.1 Comments on Classification of goods:

The Principal functions of these items appear to be projection of video/data/images etc. The goods are multipurpose projectors having HDMI/VGA/USB/Mobile connectivity facilities which can be used in Automatic Data Processing Systems of heading 8471. The goods appear to be capable of for use with an automatic data processing machine of heading 8471 in addition to connecting with other machines. In view of above, it appears that these items are rightly classifiable under CTII 85286200.

4.2.2 Comments on applicability of Sr. No. 17 of notification 24/2005 dated 01.03.2005:

The exemption under Sr. no. 17 of the Notification No. 24/2005-Cus. dated 01.03.2005 which provides exemption from payment of whole of duty of customs on goods classifiable under tariff heading at six-digit level, namely 852842, 852852 or 852862. For better understanding relevant extract of the said notification are reproduced below: -

From above it is clear that exemption notification is applicable for goods which are meant to be "solely or principally used in automatic data processing system of heading 8471".

On perusal of catalogue of the subject goods, it appeared that goods are for multipurpose projection having HDMFVGA/USB/ Mobile connectivity facilities and thus can be used in other machines other than Automatic Data Processing Systems of heading 8471. Further, with an optional HDCAST Pro Dongle, the impugned goods can wirelessly be connected to Laptop, Tablet or Mobile device and can share streaming videos, Photos or documents to the BIG Screen and appears especially designed for Business, Education Environments, auditoriums, exhibitions, entertainment venues, and simulation as manufacturer's catalogue of the goods. There is in built USB power output (SV/1.5.A) which can be utilized to provide power for streaming dongles such as Chroniccast, IIDCAST Pro, or Mobile Devices. It is clear that the impugned goods" Projectors are having various connectors Io get connected with various machines and do not get connected only with ADP machines. They cannot said to be of a kind solely or principally used in ADPM.

The importer has not substantiated its claim of use of the projectors with ADP systems other than the difference in technological specification between data projectors and video projectors. It is seen from the catalogue that the aspect ratio of the data projectors is 16:9(native) and 4:3 compatible. These projectors have a wide screen aspect ratio which is compatible with Blu ray disc DVD or IIDTV signals and widescreen laptops. All the projectors are with 3D support. These projectors contain dual HDMI inputs which can connect these projectors to different devices such as set- top box, laptop, PC, Blu-ray player or media streamer easily by assigning them to different ports. There is no need for continuous plug or unplugging when switching devices, making presentation and display hassle-free. It can be tinned into a smart projector by connecting an HDMI dongle like Google Chromecast, Amazon Fire TV. Apple TV or Roku stick. It is also pertinent to mention that manufacturer himself is advertising these functions on the website. From above it is concluded that the Projectors mentioned above are not meant to be solely or principally used in an automatic data processing system of heading 8471. Hence, benefit of Sr. no 17 of Notification 24/2005 dated 01.03.2005 for subject goods is not eligible.

5. Details of PH:

5.1 The application was listed for hearing on 31.01.2024 at 1 1:30 am. Shri. Hari Radhakrishnan, Advocate appeared for the hearing virtually. He reiterated the contention in the application that their import goods are data projection (8 Models). He submitted that the technical specification (of the subject modules) viz. Native Resolution, Aspect Ratio, Contrast ratio. Brightness in Lumens are of Data Projectors. He also argued that the contrast ratio is upgraded in some models and it is due to enhancement in technology and is justifiable in light of Hon'ble Supreme Court judgement- in the matter of CC Vs Lekhraj Jessumal and Sons 1996 (82) ELT 162(SC). He also cited several other references of this authority in which the similar judgement is passed. He contended that their subject impart merit classification under CTH 85286200 and entitled for the exemption under Notification No 24/2005-Cus dated 01.03.2005. Nobody appeared from the department side for PH either online or in person.

5.2 The applicant through their authorized representative submitted additional submission letter dated 01.02.2024 wherein they have submitted clarification regarding Contrast ratio of products in consideration. The submission has been taken on record.

5.3 The applicant through their authorized representative vide their letter dated 07.03.2024 has submitted rebuttal on the comments dated 29.12.2023 wherein the applicant has categorically denied assumption of the jurisdictional commissionerate and has submitted justifications regarding the applicability of benefit under Sr.-No. 17 of Notification No. 24/2005-Cus dated 01.03.2005. The submissions are taken on record.

6.1 I have considered all the materials placed before me for the subject products. I have gone through the case presentation, written submissions and submissions made by the applicant during the personal hearing, reliance placed on the case laws. 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.

6.2.1 I find that the jurisdictional authorities have classified such data projectors under Tariff heading 85286200, however, they have informed that on perusal of catalogue of the subject goods, it appeared that goods are for multipurpose projection having HDMI/VGA/USB/ Mobile connectivity facilities and thus can be used in other machines other than Automatic Data Processing Systems of heading 8471. Further, with an optional HDCAST Pro Dongle, the impugned goods can wirelessly be connected to Laptop, Tablet or Mobile device and can share streaming videos, Photos or documents to the BIG Screen and appears especially designed for Business, Education Environments, auditoriums, exhibitions, entertainment venues, and simulation as manufacturer's catalogue of the goods. There is in built USB power output (SV/1.5A) which can be utilized to provide power for streaming dongles such as Chromecast. HDCAST Pro. or Mobile Devices. It is clear that the impugned goods" Projectors are having various connectors to get connected with various machines and do not get connected only with ADP machines. They cannot said to be of a kind solely or principally used in ADPM.

6.2.2 I find that the jurisdictional authorities have further informed that the applicant/importer has not substantiated its claim of use of the projectors with ADP systems other than the difference in technological specification between data projectors and video projectors. It is seen from the catalogue that the aspect ratio of the data projectors is 16:9(native) and 4:3 compatible. These projectors have a wide screen aspect ratio which is compatible with Blu ray disc DVD or HDTV signals and widescreen laptops. All the projectors are with 3D support. These projectors contain dual HDMI inputs which can connect these projectors to different devices such as set- top box, laptop, PC. Blu-ray player or media streamer easily by assigning them to different ports. There is no need for continuous plug or unplugging when switching devices, making presentation and display hassle-free. It can be turned into a smart projector by connecting an HDMI dongle like Google Chromecast, Amazon Fire TV, Apple TV or Roku stick. It is also pertinent to mention that manufacturer himself is advertising these functions on the website. From above it is concluded that the Projectors mentioned above are not meant to be solely or principally used in an automatic data processing system of heading 8471. Hence, benefit of Sr. no 1-7 of Notification 24/2005 dated 01.03.2005 for subject goods is not eligible.

6.3 I find that a projector is an optical device that projects an image/video onto a surface, commonly a projection screen. The idea of a projector is to convert a small image into a much larger one so that a greater number of people can see it. A projector accepts a video/image as an input, processes it with the assistance of its inbuilt optical projection system consisting of a lens and optical source and projects the enhanced output on the projection screen. Therefore, the compatibility of a projector with input devices, such as a computer, a DVD player, etc. feeding images/videos to it and its ability to project these inputs accurately on the screen forms the most important attribute for the classification of a projector. Based on its application, a projector can be classified as a business/data projector or as a video/home theatre projector. A business projector is generally brighter and equipped to deal with a variety of media options. They generally have a low contrast ratio. They possess resolution to match computer or laptop screens. The video/home projectors are different from business projectors since they are used to project in a small room and small audience with a dark ambience and low/medium lamp brightness. They generally have a high or very high contrast ratio to support movies and gaming projection. They are characterised by high resolution along with connectors supporting audio and video equipment and gaming solutions. They are optimized for film and TV. The critical differences between the two types of projectors can be summarised as below: -

Table 1: Comparison between data projectors under consideration and video projectors

6.4 Rule 1 of the G1 Rules lays down that the titles of sections, chapters and sub-chapters are provided for case 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 relevant CTHs are reproduced below:

CTH 8528 covers, "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.

The third l-dash sub-heading falling under CTH 85286200 covers, "Projectors; capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.

CTH 85286900 is a residual entry.

CTH 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 for processing such data, not elsewhere specified or included.

Chapter Note 6 (E) to Chapter 84 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.

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

From the wordings used in the exemption Notification it can safely deduced that there may be two sets of systems that can be used in the said import goods/Projectors. 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 projectors can substantially function with Non ADP machine as well. The Jurisdictional Commissionerate also has contended the same.

6.5 To support this view, 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:

6.5.1. 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, 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

vii. Set Top Box

viii. Blu-ray Player etc.

6.6 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 un ambiguous that only those Projectors qualify for exemption when solely or principally used in an ADP System of heading 8471. Contrarily, in the instant ease the subject Projectors can also be connected with a number of other electronic devices like modem game console, Media players, DVRS, sound systems, streaming devices, Set Top Box, Blu-ray player 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 Projectors through HDMI ports.

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

6.7 Therefore, projectors working in conjunction with devices under 8471 will be classified under heading 8528. The specification for subject goods lists I ID TV compatibility standards of the products, whereas the resolution support is SVGA (800 x 600) to WXGA (1280 x 800). Further, the VGA port facilitates connection between the said projectors and laptop/computer. Therefore, it is observed that the projector in question is designed for use primarily with an automatic data processing machine. In the ease of Epson India Pvt. Ltd. K Commissioner reported in 2019 (366) EOT 847 (Tri- Chennai), the Hon'ble Tribunal, Chennai held that the projectors which are principally used for data projection by being connected to either a laptop or a desktop computer shall be eligible to be classified under CTH 85286100 (erstwhile tariff heading for projectors capable of directly connecting to and designed for use with an automatic data processing system of heading 8471).

6.8 The projectors under consideration have got certain additional ports such as HDMI, VGA, Audio IN, Audio OUT, USB-A, RS-232, RJ 45 etc., which make them also capable of being a video projector and consequently classifiable under CTI 85286900 also. GI Rule 3 states that "the heading which provides the most specific description shall be preferred to headings providing a more general description". From the technical specifications provided by applicant, it is clear that the subject goods are principally meant for use in places like conference rooms, business meetings, schools and conferences, financial institutions etc. with connectors matching that of a laptop/computer. They possess both indoor and outdoor projection capability. The differentiating features of data projectors compared to that of video projectors are discussed in Table 1. Broadly, the presence of additional features cannot dis-entitle the goods from classification under sub-heading 85286200. Reliance is placed upon Commissioner of Customs v. Vardhman 'Technology Pvt. Ltd., (301) ELT 427, where it was held that the projectors merely having additional function cannot be denied classification under CTH 85286100 (erstwhile tariff heading for projectors capable of directly connecting to and designed for use with an automatic data processing system of heading 8471). Therefore, the goods under consideration are classifiable under sub-heading 85286200.

7. I find from the Applicant's website that a few of such Projectors (e.g. AZW500, AZH500) can be turned into Smart projectors by connecting an HDMI Dongle like Google Chromccast, Amazon Fire TV, Apple TV or Roku Stick. The screenshot of the website is as below:

Dual HDMI inputs

With dual HDMI inputs, you can connect to different devices such as your set-top box, laptop, PC, Blu-ray player or media streamer easily by assigning them to different ports. There is no need for continuous plug or unplugging when switching devices, making presentation and display hassle-free. You can even turn it into a smart projector by connecting an HDMI dongle like Google Chromecast ^TM, Amazon Fire TV. Apple TV^TM or Roku^@stick.

(Source: https://www.optoma.co. in/product/azw500=)

From the above it appears that such projectors can be run without any connection with an ADP Systems of CTH 8471 because devices like Google Chromecast, Amazon Fire TV, Apple TV or Roku Stick cannot be called as ADP Machines or devices of CTH 8471. Here, I fully concur with the views expressed by the Jurisdictional authorities as stated in Para 4.2.

8.1 Further, Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended, exempts all goods of a kind solely or principally used in an automatic data processing system of 847! and falling under sub-heading 852862. However, on careful analysis, comparison and possible use of the projectors it can be seen that most of the characteristics of the subject goods such as contrast ratio and Native Aspect ratio are also similar to the characteristics of the Video projectors.

8.2.1 The applicant has relied upon the case law in case of Epson India Pvt. Ltd. V. Commissioner reported in 2019 (366) ELT 847 (Tri-Chennai). However, on going through the open website (Source: https://files.support.epson.com/docid/cpd3/cpd38863/Source/Basic Use/Tasks/screentype setting pl pg6050w.html) it can be clearly seen that the native aspect ratio/ projector aspect ratio can easily be managed to that of standard Video Projector. Hence the contention of the applicant that enhancement capabilities of projector aspect ratio is superficial, is ill-conceived and non-maintainable. At the same time the condition of "Solely or Principally' as mentioned under Sr. No. 17 of Notification No 24/2005 -Cus dated 01.03.2005 has also not satisfied due to the projector's ability to connect with Non ADP Machi ne/system.

8.2.2 Similarly, even the parameter of brightness can be altered/controlled/reduced so as to match with the range of a quality video projector. As per open website (Source: https://files.support.epson.com/docid/cpd5/cpd58571/source/basic use/tasks/ef100/adjustinglaserbrightness ef100.html) the brightness of the projector's light output be adjusted by applying the following steps:-

Step 1: Turn the projector and display an image.

Step 2: Press the Menu Button on the projector remote Control

Step 3: Select the image Menu and press Enter.

Step 4: Set up the light output setting and press enter.

Step 5: Press the left/right arrow button to adjust the brightness between 50% (Eco) and 100% (Normal).

It can be seen that if the brightness is set to 50% of the standard of the projector it comes exactly the same threshold of the video projector (i.e. 3600 lumens to 1800 lumens).

8.2.3 It appears that these aspects/features (viz. Native Aspects Ratio, Brightness, overlapping Contrast Ratio) were not one of the subject matter before the Hon'ble Tribunal in that ease to determine compatibility and connectability of the Projector with a Non ADP Machine.

8.3 In Bhavnagar University vs. Palitana Sugar Mills Pvt. Ltd (2003) 2 SCC III (vide para 59), Hon'ble Supreme Court observed that It is well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision. The case laws relied upon by the applicant is not squarely applicable to this case.

8.4 It is worthwhile to note that the applicant has not substantiated their contention that the various ports available in such Projectors (e.g. HDMI) can only be connected to an ADP Machine and not otherwise. Similarly, the ability to connect these ports with Non-ADP machine is not categorically denied either, in their application or any submission.

9.1 It is to be underlined that the wordings and language used in classification of goods under CTI 85286200 and wordings and language used in exemption notification are differently used. In other words, for satisfying the classification under CTI 85286200 two aspects are required- lsl 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 CTII 8471, whereas for getting exemption benefit it must also satisfy the additional aspect that these goods should solely or principally be used in an ADP System of CTH 8471 and not with a Non-ADP Machine.

9.2 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. In the case of M/s. Grasim Industries Limited vs. Collector of Customs, Bombay, 2002, the Hon'ble Supreme Court has observed that "No words or expressions used in any statute can be said to be redundant or superfluous. In matters of interpretation one should not concentrate too much on one word and pay too little attention to other words. No provision in the statute and no word in any section can be construed in isolation. Every provision and every word must be looked at generally and in the context in which it is used. It is said that every statute is an edict of the legislature. The elementary principle of interpreting any word while considering a statute is to gather the mens or sententia legis of the legislature. Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the Court to take upon itself the task of amending or alternating the statutory provisions.

9.3 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 of Cus. (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 danse (at the threshold stage) should he 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. The applicant has contended that that mere presence of different ports does not change the principal usage of the products in question. The presence of the said ports is for convenience of the users and is result of the advancement in technology and these aspects cannot change the classification of the subject goods to that of Video projectors and it is agreed upon based on the arrangement of tariff, case laws cited above. However, as far as exemption under Sr. No 17 of Notification No 24/2005-Cus dated 01.03.2005 as amended, is concerned such technological development and advancement equally merit consideration in as much as they can alter its Principal use.

11. In view of the foregoing discussions, I find that the subject goods bearing model no (i) AZX360ST (ii) AZW500 (iii) AZH500 (iv) AZH360ST (v) AZH430 (vi) AZH460 (vii) AZH460ST (viii) ZH507 are classifiable under CTI 85286200 of the first schedule to the Customs Tariff Act. 1975 however, they would not be eligible to avail benefit 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