TaxTMI 
TaxTMI 
2025 (12) TMI 1622
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....o. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended. The applicant vide their earlier application dated 14.08.2023 has submitted as under: 1.3 The applicant is a registered private limited company involved in the business of trading. They intend to import data projectors bearing model nos. PA503S-3, PA700S, PA700X, PA700W and PS502X. 1.4 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. 1.5 The applicant is of bonafide belief that the subject....
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.... 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 A173 (SC). 1.9 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. 1.10 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 (370) 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 t....
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.... 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 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. 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....
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....tification No. 24/2005-Cus dated 01.03.2005 as amended. The submissions are as below: 1.13.2 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. 1.13.3 With respect to the presence of USB Type - A port, it is submitted that the Department has failed to appreciate that th....
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....ind 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 the 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. 1.13.6. It is submitted that the second point to be considered is that SI. 17 of the above notifica....
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....iberal 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 to 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, (2011) 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 a....
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....3.8 It is further submitted that mere presence of USB 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 results of the advancement in technology. An identical dispute came up for consideration before the Hon'ble CESTAT, Principal Bench in the case of Benq India Private Limited in Final 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. It is submitted that an identical stand was taken by the Hon'ble CESTAT, Hyderabad Bench in the case of AVECO Viscomm Private Limited reported in 2018 (362) E.L.T. 624 (Tri. - Hyd.). The said findings squarely apply to the present facts as well. 1.13.9 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 Ho....
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....jectors: 8528 61 -- Of a kind solely or principally used in an automatic data processing system of heading 8471 --------- --------- --------- (A) MONITORS OF A KIND SOLELY OR PRINCIPALLY USED IN AN AUTOMATIC 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 a....
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....of multimedia speakers having additional features like presence of USB ports and F.M. 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). 1.13.11 In view of the above, the applicant 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. 1.14 After following due process of law, this advance ruling authority vide Ruling No. CAAR/Mum/ARC/97/2024 dated 10.07.2024 had given the following ruling on the applicant's question: "12. In view of the foregoing discussion, 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-Cu....
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....h Court in the applicant's own case. He contended that the presence of additional features does not exclude the product from the scope of its correct classification. Further, he emphasized the language used in the relevant exemption notification, particularly the phrase "all goods of a kind solely or principally," to support the eligibility of the product for exemption. He also submitted that the classification of the goods was not in dispute. No one appeared on behalf of the department during the hearing. Discussion and findings 3.1 I have considered all the materials placed before me for the subject products for de nova consideration as per direction of the Hon'ble High Court of Madras. 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. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework. 3.2 The Applicant has sought advance ruling in respect of the following questions: a. Whether the product i.e. Data Projectors bearing Model Nos. PA503S-3, PA700S, PA700X, PA7....
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.... for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus". The relevant Customs Tariff entries and HSN Explanatory Notes to Heading 8528 is reproduced below for ease of reference: Chapter/ Heading/ Sub-heading/Tariff item Description of goods 8528 Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus - Projectors: 8528 62 00 - Capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471 8528 69 00 - Other "This heading includes: (1) Monitors and projectors, not incorporating television reception apparatus. (2) Television reception apparatus, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus, for the display of signals (television sets). (3) Apparatus for the reception of television signals, without display capabilities (e.g., receivers of satellite television broadcasts). ....
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....height adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic design characteristics to facilitate prolonged periods of viewing at close proximity to the monitor, (x) They may utilize wireless communication protocol to display data from an automatic data processing machine of heading 84.71. (B) MONITORS OTHER THAN THOSE CAPABLE OF DIRECTLY CONNECTING TO AND DESIGNED FOR USE WITH AN AUTOMATIC DATA PROCESSING MACHINE OF HEADING 84.71 This group includes monitors which are capable of receiving signals when connected directly to the video camera or recorder by means of composite video, s-video or co-axial cables, so that all the radio-frequency circuits are eliminated. They are typically used by television companies or for closed- circuit television (airports, railway stations, factories, hospitals, etc.). They can, moreover, have separate inputs for red (R), green (G) and blue (B), or be coded in accordance with a particular standard (NTSC, SECAM, PAL, D-MAC, etc.). For reception of coded signals, the monitor must be equipped with a decoding device covering (the separation of) the R, G and B signals. They are not fitted with con....
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....ata onto data media in coded form and machines for processing such data, not elsewhere specified or included. Chapter Note 5(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. Therefore, projectors working in conjunction with devices under 8471 will be classified under Heading 8528. The technical data sheet of these projectors lists computer graphics compatibility standards, namely, SVGA (Super Video Graphics Array), XGA (Extended Graphics Array) and WXGA (Wide Extended Graphics Array). Further, the HDMI, VGA port facilitates the connection between the said projector and a laptop/computer. Therefore, it is evident that the projector in question is designed for use with an automatic data processing machine. 3.6.4 It is further observed that the other ports namely HDMI, USB Type A port can also be used to connect such Projectors to a Non-ADP Machines either. The specification for subject goods lists HDTV compatibility standards of the products, whereas the resolution sup....
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....column 3 of the Notification, the benefit is granted to all goods falling under the aforementioned sub-headings 'of a kind solely or principally used in an automatic data processing system of heading 8471'. 3.7.2 Therefore, in order to be eligible for the benefit under the exemption notification, any goods must satisfy the following two conditions: a. These must be classifiable under CTSH 8528 42 or 8528 52 or 8528 62; b. These goods must be of a kind which are solely or principally used in an ADP system of CTH 8471; 3.7.3 As discussed above, it is undisputed that the projectors in question are capable of directly connecting to and designed for use with an ADP machine of Heading 8471. Accordingly, I am of the view that these projectors are rightly classifiable under CTI under CTI 85286200 (Projectors-capable of directly connecting to and designed for use with an automatic data processing system of heading 8471) of the First Schedule to the Customs Tariff Act, 1975. 3.7.4 The second condition to be satisfied is that these must be "of a kind which are solely or principally used in ADP system of CTH 8471". It is important to note that the sub-heading....
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.... places like conference rooms, business meetings, financial institutions etc. with connectors matching that of PC, are classifiable under Tariff Item 8528 61 00 (erstwhile 85286200) of Customs Tariff Act, 1975 and not under Tariff Item 8528 69 00 of the said Tariff as Video Projectors. Such goods when imported are eligible to benefit of exemption under Notification No. 24/2005. This decision was upheld by the Hon'ble Supreme Court in Commissioner v. Epson India Pvt. Ltd. [2019 (366) E.L.T. A173 (S.C.)], thereby attaining finality. c. Acer India Pvt. Ltd., Vs. Commissioner of Customs(Import), Chennai [Final Order No. 40011 of 2024 in Appeal No. C/40333 of 2015, decided on 3-1-2024]- The Tribunal held that while "common parlance" or "commercial usage" test was generally preferable for classifying consumer goods, but when goods have to be tested for their sole or principal use, their technological capabilities could not be completely discarded - Specifications and technological features of data projector had persuasive role in determining intended use solely and principally with ADP machines - Keeping with judicial discipline, reasoning in Coordinate Bench decision was fo....