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/105/2023 - O/o Commr-CAAR-MUMBAI

Ruling

M/s Viewsonic Technologies India Private (IEC70409009709) (hereinafter referred to as 'the applicant', in short) filed an application dated 14.08.2023 for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR, in short). The said application was received in the secretariat of the CAAR. Mumbai on 16.08.2023. along with its enclosures in terms of Section 28H(1) of the Customs Act, 1962 (hereinafter referred to as the 'Act'). The applicant is seeking advance ruling on the classification of 05 models of "Data Projectors' (hereinafter referred to as 'subject goods') and eligibility of exemption notification benefit under Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended. The models proposed to be imported are PA503S-3. PA700S, PA700X, PA700W and PS502X.

2. Submission by the Applicant:

2.1 The applicant is a registered private limited company involved in the business of trading. I he applicant is also registered under the GST bearing registration No 33AABCV7912QIZV. They intend to import data projectors bearing model nos. PA503S-3, PA700S. PA700X, PA700W and PS5O2X.

2.2 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 CTT I 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 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 as amended.

3. Interpretation of Law by the Applicant:

3.1 The classification of Data Projector having Model Names - PA503S-3, PA700S, PA700X, PA700W and PS502X, from China fall under chapter 8528. It is as follows:

"8528 MONITORS AND PROJECTORS, NOT INC ORPO RATING 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, S-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 - PA503S-3. PA700S, PA700X, PA700W and PS502X. The models PA503S-3 and PA700S has a native resolution of 800x600 (SVGA) The models PA700X and PS502X have a native resolution of 1024x768 (XGA) and the model PA700W has a native resolution of 1280x800 (WXGA). The terms WXGA (Widescreen Ultra Extra 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 UI ID (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. The contrast ratio of the projector in consideration is 28000:1, 12500:1 and 22000:1 whereas, the contrast ratio of home theatre/video projectors is in the range of 1,00,000:1 and 12,00,000:1. In addition, the native aspect ratio of the home theatre/video projectors is 16:9, whereas the native aspect ratio of the products in question is 4:3. The literature of all the five models are enclosed to the CAAR-1 application.

3.3 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) ELTA 173 (SC).

3.4 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.

3.5 It is also submitted that the principal bench of the Hon'ble CESTAT in the case of Sony India Pvt. Ltd. K Commissioner of Customs and Central Excise, New Delhi reported in 2019 (370) ELT / 774 (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 (his 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 of Customs, Bombay [1997 (6) SCC 564 = 1997 (93) E.L.T. 641 (S.C.)J;

(ii) In Sun Export, the Supreme Court observed that any ambiguity in a tax exemption provision or notification must be interpreted in favour 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 retied 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. AH 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 847] or under 8528 69 00. This issue stood concluded in favour of 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. Il 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 duly 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. Il is only when there is any ambiguity in die 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.

3.6 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/Murn/ARC/63/2021 dated 28.10.2021.

3.7 From the above cecisions 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.

3.8 In view of the above the applicant has requested ruling with respect to the following.:-

i. The classification of the subject goods under CTH 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 & Reply from jurisdictional Commissionerate:

4.1 The applicant intends to import the said goods through O/o The Commissioner of Customs Chennai II Commissionerate, Custom House 60 Rajaji Salai Chennai 600 001. The application was forwarded to the jurisdictional Commissioner of Customs for comments vide letter dated 05.09.2023. Reminder letters dated 21.12.2023 & 30.01.2024 were also forwarded to the Jurisdictional Commissionerate.

4.2 Jurisdictional Commissionerate through their letter dated 01.05.2024 issued vide F. No. CUS/APR/APPL/45/2024-GR 5A has inter-alia stated that:

i . The Data Projectors 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 85286200. From the technical literature provided by the applicant the listed models have S-Video port and/or HDMI connectivity and are having the capability of connecting to and designed for use with an automatic data processing machine of heading 84.71. and can be classified under 85286200.

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 1 'DM! connectors and USB-type A connectors in al! 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.

5. The application was listed for hearing on 02.02.2024. Sh. L. Gokulraj. Ld. Advocate appeared for online hearing and re-iterated the contention of the applicants submitted in their written submission. He contended that the subject goods are different 5 models of data projectors and all of that satisfies the parameters viz. Native Aspect Ratio, Native resolution, contrast ration. Brightness of the data projectors with additional features & to be connected with ADP machine through different ports. He also submitted and referred a few case laws:-

a. CAAR/Mum ARC/70/2021 dated 20.12.2021

b. CAAR/Mum/ARC/63/2021 dated 28.10.2021

c. CAAR/M um/A RC/16/2022 dated 08.06.2022

d. CAAR/Mum/ARC/14/2023 dated 01.02.2023

The authorized representative submitted that the subject goods are classifiable under CTI 85286200. Nobody appeared for personal hearing in person or through virtual module on behalf of the jurisdictional Commissionerate.

5.1 The applicant through their authorized representative vide their letter dated 27.05.2024 has submitted rebuttal on the comments dated 01.05.2024 wherein the applicant has categorically denied contention of the jurisdictional commissionerate and has submitted their justifications regarding the applicability of benefit under Sr. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005 as amended. The submissions are as below:

5.1.1 It is submitted that the Department has contended that the subject goods are ineligible to claim the benefit of the Notification dated 01.03.2005, only because the subject goods has HDMI and USB-Type A connectors in all the models. However, the Department has not provided the reason or observation as to how the presence of these above-mentioned connectors changes the nature of the subject products. It is submitted that the subject goods are ''Data Projectors' which are capable of connecting to Automatic Data Processing machine of the heading 8471. The Department themselves has agreed in comments to Question 1 at paragraph 3 that the subject products are connected to and designed for use with an Automatic Data Processing machine through HDMI connectivity. The use of HDMI ports are for connecting to an Automatic Data Processing machine and therefore, the observations in the comments that the HDMI ports are used to connect to a non-ADP machine is absurd.

5.1.2 With respect to the presence of USB Type - A port, it is submitted that the Department has failed to appreciate that the USB Type A port is used as a power delivery in the subject products and the same is clear from the specification sheet produced along with the application. It can be seen in the Specification sheet that "USB Type A (Power): 1 (5V/2A)" is reflected under the heading 'Output', where other outputs such as Monitor out. Audio out and speaker is mentioned. Through the said port, the electrical power with a maximum power of 5 Volt and 2 Amps can be supplied and devices like keyboard, mic, mouse, etc. can be connected, further, the subject projectors can be connected to an Automatic Data Processing machines through USB port for troubleshooting minor errors and updating software. However, the said ports cannot be used as a video port and further, the subject goods cannot deliver its functions without connecting to an Automatic Data Processing machines.

5.1.3 Without prejudice to the above-submissions, it is submitted that SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005 is clear that the said exemption to BCD applies to products falling under CTH 8528 42. 8528 52 or 8528 62. which of a kind solely or principally used in an Automatic Data Processing System of heading 8471. SI. 17 of the said Notification reads as under:

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

5.1.4 The above entry consciously employs the word 'of a kind'. The expression 'of a kind' widens the scope of the words, immediately succeeding it. The meaning of the term 'of a kind used in" has been succinctly explained in the decision of the Hon'ble Tribunal in the case of Uday Traders vs. Collector of Customs, Nhava Sheva reported in 1996 (82) ELT 506 (Tri). The Hon'ble Tribunal held as follows:

"5. Heard the submissions of both sides. On a careful consideration we find that the only point for determination before us is as to how to interpret the words 'of a kind used in'. These words can be sub-divided into two groups. The first group is 'of a kind' and the second group can be 'used in'. Once we say that the goods are used we want to confine it to that the person importing the goods must use the goods in the item following the word 'in'. In the instant case it is not only the words 'used in' but also 'of a kind'. We find that 'of a kind' widens the scope of the term 'used in' meaning thereby that the use of the imported item in homoeopathic medicines is one of the several uses. The admitted position in the instant case is that 'Lactose' is used not only in homoeopathic medicines but is put to a number of other uses such as preparation of food (Sic) etc. We therefore hold that either ihe condition of actual user or the condition of end-use certificate is not built in the notification and therefore the benefit of this notification cannot be denied. In view of this finding the impugned order is set aside and all three appeals are allowed. Consequential relief if any, will be admissible to the appellants in accordance with law. "

Therefore, SI. 17 of Notification dated 01.03.2005 should be interpreted to mean that it not only includes projectors which are solely used along with an ADP but also includes projectors, which are principally traded and bought by a common man to be used along with an ADP, though such projectors may have additional or independent functionality.

5.1.5 . It is submitted that the second point to be considered is that SI. 17 of the above notification also employs the word 'Principally'. Therefore, SI. 17 will also include projectors, which are mainly used along with an ADP, but may also be able to function independently. It is submitted that if such an interpretation is not accorded to SI. 17 of the above Notification, then the usage of the word 'principally' in the notification would have to be considered as redundant. It is submitted that it is a well settled principle of interpretation that every word employed in the legislation has to be given its effect and its true meaning and any interpretation which makes any words employed in legislation as redundant or otiose has to be eschewed. Reliance is placed on the decision of the Hon'ble Supreme Court in the case of Bansal wire Industries Limited vs. State of Uttar Pradesh, reported in 2011 (269) ELT 145 (SC). The relevant paragraphs are reproduced below:-

"34. It is a settled principle of law that the words used in the section, rule or notification should not be rendered redundant and should be given effect to. Il is also one of the cardinal principles of interpretation of any statue that some meaning must be given to the words used in the section. Expression "Wire rods and wires" which is mentioned in item no. (xv) would not and cannot cover the expression "tools, alloy and special steels " of entry no. (ix) nor it would refer to the expression "Iron and Steel" as each item used in entry nos. (ix) and (xv) are independent items not depending on each other at all as has been held in the case of Pyare Ial Mehrotra (supra).

35. In arriving at the aforesaid conclusion, we find support from the decision of this Court in Union of India v. Hansoli Devi reported in (2002) 7 SCC 273 wherein this Court held that it is a cardinal principle of construction of a statute that when the language of the statute is plain and unambiguous, the court must give effect to the words used in the statute.

36. Besides, in a taxing Act one has to look merely al what is clearly said and there is no room for any intendment. In a taxing statute nothing is to be read in, nothing is to be implied, one can only look fairly at the language used. "

5.1.6 It is also a well settled principle of interpretation that an exemption notification has to be construed strictly. However, once a subject falls within the ambit of the Notification, liberal interpretation has-to be given to the Notification wordings so as to ensure that the said subject is granted the benefit. Reliance is placed on the decision of the Hon'ble Supreme Court in the case of Bharat Diagnostic Centre vs. Commissioner of Customs, reported in 2014 (307) ELT 632 (SC) and relevant paragraph reads as follows:-

"5. With regard to the interpretation and construction of a notification granting exemption, it is settled that at the first instance, strict interpretation would 'apply, that is Io say in the case of ascertaining its applicability. Thereafter, the Court may adopt the liberal approach within the particulars of the said notification. The case of Gammon (I) Ltd. v. Commr. of Customs, GDI I) 12 SCC 499 2011 (269) E. L. T. 289 (S). (C). reiterated, the well-settled position of law that a provision providing for an exemption has to be construed strictly. The following cases would, further make the position of law clear on this point.

6. In the case of Commr. of Customs (Imports) v. Tullow India Operations Ltd., (2005) 13 SCC 789 - 2005 (189) E.L.T. 401 (S.C.), it was held that:

"... The principles as regards construction of an exemption notification are no longer res Integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning where for the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed liberally. An eligibility criteria, therefore, deserves a strict construction, although construction of a condition thereof may be given a liberal meaning. "

7. In the case of A. P. Steel Re-Rolling Mill Ltd. v. State of Kerala, (2007) 2 SCC 725, it was held that .

".. The general principles with regard to construction of exemption notification are not of much dispute Generally, an exemption notification is to be construed strictly, but once it is found that the entrepreneur fulfils the conditions laid down therein, liberal construction would be made. "

8 Further in the case of Collector of Customs (Preventive) v. Malwa Industries Ltd., (2009) 12 SCC 735 - 2009 (235) E.L. T. 214 (S.C). if was held that :

"... An exemption notification should be read literally. A person claiming benefit of an exemption notification must show (hat he satisfies. the eligibility criteria. Once, however, it is found that the exemption notification is applicable to the case of the assessee. the same should be construed liberally. "

9. While defining or explaining the meaning of a word or phrase in a statute, the word 'include ' is generally used to enlarge the meaning of those words or phrases. When the word . 'include ' is used as such, those words or phrases must be construed as comprehending not only-such things as they signify according to their natural import or as per common parlance, but also those things which the interpretation or explanation danse declares that they shall include. This principle has been enumerated in several decisions of this Court. "

In the present case, even the Department admits mat the goods fall under CTH 8528 6200, which deals with projectors, which are capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471. Therefore, admittedly the subject projectors are principally used along with an ADP. Consequently, the subject projectors fall under the ambit of SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005

5.1.7 It is further submitted that mere presence of USB polls does not change the principal usage of the products in question. (he presence of the said ports is for convenience of the users and is results of the advancement in technology. An identical dispute came up for consideration before the Hon'ble CUST A T. Principal Bench in the case of Benq India Private Limited in Pinal Order No. 50832-50843/2022 dated 12.09.2022 and the Hon'ble Tribunal has held that the addition of multiple ports in the goods will not take away the basic nature of the goods, which is to work in conjunction with. Automatic Data Processing Machine and ordered in favour of the importer. Copy of the said decision is enclosed as Annexure - A. It is submitted that an identical stand was taken by the Hon'ble CESTAT, Hyderabad Bench in the case of AVE.CO Viscomm Private Limited reported in 2018 (362) E.L.T. 624 (Tri. - Hyd.). The said findings squarely apply to the present facts as well. Copy of the said decision is enclosed as Annexure B.

5.1.8 It is submitted that an identical issue came up for consideration before the Principal Bench of the Hon'ble CESTAT in the case of Sony India Pvt. Ltd. Vs. Commissioner of Customs & Central Excise, New. Delhi reported in 2019 (370) E.L.T. 1774 (Tri. - Del.). The Hon'ble Tribunal held as follows:-

"25. In M/s. Epson India Pvt. lid. v. Commissioner of Customs, Chennai [2018 (3) TMl 364-CESTAT, Chennai

26. It also needs to be noted that Supreme Court dismissed Civil Appeal filed by the Revenue against the decision of the Tribunal in M/s Epson India Pvt. Ltd. [2019-TIOL-219-SC-CCS = 2019 (366) E.L.T. Al 73 (S.C.) - (Commissioner of Customs v. M/s. Epson India Pvt. Ltd.) on 21 January, 2019. The judgment of the Supreme Court is reproduced below :

"Delay condoned

We find no reason to deviate from the view expressed by the Appellate Tribunal whilst following the earlier decisions on the matter in issue, which had attained finality including on account of dismissal of two appeals by this Court. "

27. A perusal of the aforesaid order of the Supreme Court passed in the Civil Appeal filed by the Department to assail the order of the Tribunal in M/s. Epson India Pvt. Ltd would show that the Supreme Court saw no reason io deviate from the view expressed by the Tribunal, particularly, when the Tribunal had decided the matter following earlier decisions of the Tribunal which had attained finality, including on account of the dismissal of the two Civil Appeals by the Supreme Court.

28. In view of the aforesaid judgments of the Supreme Court and the decisions of the Tribunal, it has to be held that the colour data projectors imported by Sony India are classifiable under Heading 8528 61 00.

29. Learned Authorised Representative of the Department, however, made an attempt to support the impugned order of the Commissioner by placing reliance on the Explanatory Notes to the Harmonised System of Nomenclature contained in Chapter 85. The relevant provisions, on which reliance was placed by Learned Authorised Representative of the Department, are reproduced below :

"85.28 Monitors and projectors, no! incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus.

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- Projectors :

852861-- Of a kind solely or principally used in an automatic data processing system of heading 8471

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----------------

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(A) MONITORS OF A KIND SOLELY OR PRINCIPALLY USED IN AN A UTOMATIC DATA PROCESSING SYSTEM OF HEADING 84. 71

This group includes Cathode Ray Tube and non-Cathode Ray Tube (e.g., flat panel screen) monitors which provide a graphical presentation of the data processed. These monitors are distinguishable from other types of monitors (see (B) below) and from television receivers. They include :

(1) Those monitors which are capable of accepting a signal only from the central processing unit of an automatic data processing machine and, therefore, are not able to reproduce a colour image from a composite video signal whose waveform conforms to a broadcast standard (NTSC SECAM, PAL, D-MAC, etc.,) They are fitted with connectors characteristic of data processing systems (e.g,, RS-232C interface, DIN or SUB-D connectors) and do not have, an audio circuit. They are controlled by special adaptors (e.g.. monochrome or graphics adaptors) which are integrated in the central processing unit of the automatic data processing machine.'

30. The contention of the Learned Authorised Representative of the Department, based on the aforesaid, is that what is stated for monitors would also apply for projectors and so Hyectors which are capable of accepting a signal only from the central processing unit of an automatic data processing machine, can be classified under 8528 61 00.

31 . It is not possible to accept the said contention of the Learned Authorised Representative of the Department. What is included in (A) has been stated and it is monitors which provide a graphical presentation of the data produced. These monitors are distinguishable from other-types of monitors and they include monitors which are capable of accepting a signal only from the central processing unit of an automatic data processing machine. Even if the same analogy is applied to projectors, as has been contended by Learned Authorised Representative of the Department, then too it would not be possible to accept the contention of the Learned Authorised Representative of the Department that the Projectors would fall under Heading 8528 69 OG. What has to be seen is whether the Projectors are of a kind solely or principally used in an A DP system of heading 8471 and this issue has been elaborately examined in the aforesaid decisions of the Tribunal. Thus, the judgments of the Supreme Court and the decisions of the Tribunal cannot be ignored even if they have not considered the aforesaid (A) contained in Chapter 85 of the Explanatory Notes to the Harmonised System of Nomenclature, which as noticed above, has no bearing on the issue at hand. ''

The underlined portions marked above would show that precisely the very same contention of the Revenue that only projectors which are only capable of being connected with an ADP will merit classification under CTH 8528 6200 and be eligible for exemption benefit in terms of SI. No. 17 of Notification No. 24/2005 dated 01.03.2005 was rejected by the Hon'ble CESTAT and this decision was affirmed by the Hon'ble Supreme Court. The decision of the Hon'ble CESTAT in the case of Sony India (Supra) is enclosed as Annexure C.

5.1.9 It is further submitted that identical issue with respect to speakers came up for consideration before the Hon'ble CESTAT, Bangalore Bench in the case of Logic India Trading Co. vs. Commissioner of Customs, Cochin., reported in 2016 (337) ELT 65 (Tri-Bang.). The issue therein was the classification of multimedia speakers having additional features like presence of USB ports and EM, Radio. The Hon'ble Tribunal held that the presence of additional features does not change the principal and essential function of the speaker. The said findings was affirmed by the Hon'ble Supreme Court, reported in 2016 (342) ELT A34 (SC). Copy of the said decision is enclosed as Annexure - D. The law laid down in the said decision squarely applies to the present facts as well.

5.1.10 In view of the above, it is most humbly submitted that the products in consideration are 'Data Projectors' classifiable under CTH 8528 6200 and are eligible for exemption benefit in terms of SI. No. 17 of Notification No. 24/2005 dated 01.03.2005.

6.1 I have considered all the materials placed before me for the subject products. I have gone through the case presentation, written submissions, contention of the department 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. I find that the jurisdictional authorities have approved the classification of such data projectors under Tariff heading 85286200, however, they have contended that such projectors 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-type A 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. The issue at Hand is to decide the classification of the 'Projectors' bearing model numbers as specified in para 1 and the applicability of Sr. No. 17 of Notification No. 24/2005-Cusloms, dated 01.03.2005, as amended.

6.2 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

6.2.1 The applicant has in its written submission 27.05.2024 mainly focused on the word 'Principally' and ignored the other word 'Solely' associated therewith. It appears that there is no contrast in both the wordings and should be interpreted collectively. 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.

6.2.2 The applicant has further relied upon the case laws in which the features involved with the projectors are not identical to the features involved in the projectors in the present application. In this instant case some of the features are controllable one and have equal video projector compatibility that can be adjusted as per actual requirement. Further the said devices are equipped with the advanced HDMI ports etc. which can further be used for both ADP and Non-ADP Systems. This is not the intent of the legislature to extend such exemption benefits to the devices compatible to a non-ADP system. The wordings used are very clear that it has to be should be used with ADP System and riot with a Non-ADP System. Any interpretation beyond the wordings used will be against the intention of the legislature. It is important to note that what is not mentioned in the statute or left out deliberately by the legislature should also be given equal importance. In the instant case the applicant has not categorically denied the use of the subject goods with a Non- ADP System.

6.3 Rule I of the GI 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 fulling 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 automat ic 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 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 a Non-ADP machine as well. The Jurisdictional Commissionerate also has contended the same.

6.4 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:

6.4.1. HDMI: HDMI provides an interface between any audio/video sources such as Set lop 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.

6.5 ' 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 Projectors qualify for exemption when solely or principally used in an ADP System of heading 8471. Contrarily. in the instant case the subject Projectors can also be connected with a number of other electronic devices like modern 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 cither.

6.6 Therefore, projectors working in conjunction with devices under 8471 will be classified under heading 8528. The specification for subject goods lists HDTV 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 evident that the projector in question is designed for use with an automatic data processing machine. In the case of Epson India Pvt. Ltd. V. Commissioner reported in 2019 (366) ELT 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).

6.7 The projectors under consideration have got certain additional ports such as HDMI, VGA, Audio In. Audio Out. USB-A, RS-232, etc., which make them capable of being a video projector and consequently classifiable under CTI 85286900 also. G1 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. 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.

7.1 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 8471 and falling under sub-heading 852862. However, on careful analysis, comparison and possible use of the projectors it can be seen that some of the characteristics of the subject goods such as Native Aspect ratio (Amendable) are also similar to the characteristics of the Video projectors.

7.2.1 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/screen type setting pl pg6G50w.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 a Non-ADP Machine/system.

7.2.2 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/cpd5857l/source/basic use/tasks/efl00/adjusting laserbrightness efl 00.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 falls under the threshold of the video projector (i.e. 4000-4500 lumens to 1800-2400 lumens).

7.2.3 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 case to determine compatibility and connectability of the Projector with a Non-ADP Machine.

7.3 In Bhavnagar University vs. Palitana Sugar Mills Pvt. Ltd (2003) 2 SCC III (vide para 59). 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.

7.4 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 cither, in their application or any submission.

8.1 It is to be underlined that the wording and language for classification of goods under CTI 85286200 and the wordings and language used in the said notification are differently used. In other words, for satisfying the classification under CTI 85286200 two aspects are required- Pl 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 CHI 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 used in a Non-ADP System.

8.2 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. The Hon'ble Supreme Court in its judgment dated 05.05.2021 in case of Civil Appeal No. 3 123 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, therefore, 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.

8.3 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 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 he 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 he 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.

9. The applicant has argued that due to the technological development and advancement the subject projectors have been equipped with better performance in terms of different parameters/specification such as Native aspect ratio 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.

10.1 A similar/identical application has been filed before this authority seeking same kind of clarification/ruling in respect of similar projectors by another applicant. Usage of such projectors were scrutinized at the applicant/importers website. It was found out that some Projectors (e.g. AZW500. AZH500) could be turned into Smart projectors by connecting an HDMI Dongle like Google Chromecast. 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™, Amazon Fire TV, Apple TV^TM or Roku^@ stick.

(Source: https://www.optoma.co.in/productazw500 )

From the above it is apparent 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.

10.2 Similarly, in the above case it is also observed that different features like Contrast Ratio, Brightness and Native Aspect ratio in both of the Data Projector (in the Product Catalogue) and Video Projector (Normal range) are found similar and overlapping. Hence it is found that the subject goods predominantly/Principally have the characteristics of a Data projector but at the same lime it is also found capable to function as a video projector through HDMI Dongle like Google Chromecast, Amazon Fire TV, Apple TV or Roku Stick. Therefore, I find that the condition of notification of solely or principally is not completely satisfied.

11. 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 8471 and falling under sub-heading 852862. 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 with these ports with Non-ADP machine is not categorically denied in their application or submissions. Herc, I concur with the views expressed by the Jurisdictional authorities as slated in Para 4.2 (i & ii).

12. In view of .the foregoing discussions. I find that the subject goods bearing model nos. (i) PA503S-3 (ii) PA700S. (iii) PA700X, (iv) PA700W and (v) PS502X 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.

13. I rule accordingly.

(P K Rameshwaram)

Customs Authority for Advance Rulings, Mumbai