Per Dr. Chittaranjan Satapathy
Heard both sides. These 13 appeals are taken up together as a common issue is involved in all these appeals. Shri K.S. Venkatagiri, learned counsel appearing for the appellants states as under:-
‘The issue herein pertains to classification of data projectors whether under Tariff Item 8528 61 00 or under 8528 69 00 and the availability of the benefit of exemption under Notification No. 24/2005-Cus. dated 01.03.2005.
2. The contending entries read as follows:
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 61 00
-- Of a kind solely or principally used in an automatic data processing system of heading 8471
8528 69 00
-- Other
3. Notification No. 24/2005-Cus. dated 01.03.2005 grants exemption from basic customs duty to various goods, which are bound by Information Technology Agreement (ITA). S. No. 17 of the Notification covers goods of 8541 or 8528 51 or 852861.
4. The present appeals relate to the goods imported by the appellant under the following Bills of Entry:
S. No.
B/E No. and DATE
CLASFN.
AS PER B/E
DESCRIPTION OF GOODS
1.
342739/27.03.07
8528 61 00
XD 1270D DLP DATA XGA RSP ITEM PROJECTOR UK POWER
2.
354169/16.04.07
8528 61 00
XD 1150 DLP DATA PROJECTOR SVGA UK POWER RSP ITEM
3.
345263/30.03.07
8528 61 00
PD117D DLP DATA PROJECTOR SVGA UK POWER RSP ITEM
4.
339521/22.03.07
8528 61 00
XD 1150 DLP DATA PROJECTOR SVGA UK POWER RSP ITEM
5.
339501/22.03.07
8528 61 00
XD 1150 DLP DATA PROJECTOR SVGA UK POWER RSP ITEM
6.
340352/24.03.09
8528 61 00
PD527D DLP XGA PROJECTOR RSP ITEM /1 DVI UKPOWER AIL
7.
364723/03.05.07
8528 61 00
XD 1270D DLP DATA XGA RSP ITEM PROJECTOR UK POWER
8.
364727/03.05.07
8528 61 00
PD527D DLP XGA PROJECTOR RSP ITEM /1 DVI UK POWER AIL
9.
364834/03.05.07
8528 61 00
XD 1250P DLP DATA XGA PROJECTOR RSP ITEM UK POWER AIL
10.
377114/22.05.07
8528 61 00
XD 1150 DLP DATA PROJECTOR RSP ITEM SVGA UK POWER AIL
11.
376678/22.05.07
8528 61 00
PD117D DLP DATA PROJECTOR SVGA UK POWER RSP ITEM
12.
336717/19.03.07
8528 69 00
PD126D DLP PROJECTOR XGA UK POWER AIL
13.
368770/09.05.07
8528 61 00
PD126D DLP PROJECTOR XGA UK POWER AIL
5. The exemption claimed by the appellant was not granted by the assessing officer and initially, the goods were re-assessed under Tariff item 8528 69 00 (S. No. 12 above). In all other cases, the goods were classified under Tariff item 8528 61 00, but the exemption was denied. The appellant filed letters seeking the benefit of Notification ibid in each case and since their pleas were not accepted, paid duty under protest.
6. The appellant filed appeals against the assessment in the aforesaid Bills of Entry and the learned Commissioner (Appeals), relying on a catalogue of the appellant held that the goods have multifarious uses and therefore are not of a kind solely or principally used in the ADP and are rightly classifiable under 85286900.
7. The appellant submits that all the projectors imported by them are data projectors. These projectors, as the name suggests, are basically used in seminars, presentation, class room teachings, business meetings and conferences. The data received from a computer (laptop or desktop) are beamed on a screen.
8. The appellant has sold these goods to various corporates, Government organizations and educational institutions. A list of the buyers and copies of the invoices are enclosed. The appellant is also associated with Educomp solutions, a Gurgaon based education firm to promote computer aided education in about 1700 to 1800 schools in tier-2 cities. Presently, the appellant is supplying the projectors for this project.
9. The appellant submits that these projectors are distinct from video projectors which are solely used for audio / video applications and cater to completely different market segments.
10. The native aspect ratio and the native resolution of a projector determines whether a projector is a data projector or a video projector.
11. The aspect ratio is the ratio of the image width to image height. The native aspect ratio is the aspect ratio optimized for a particular device which is based on the viewing material and the intended audience. The data projectors have native aspect ratio of 4:3 and the video projectors require native aspect ratio of 16:9. All projectors will support multiple ratios. However, images shown in the native aspect ratio will utilize the entire resolution of the display and achieve maximum brightness. Images shown in other than native aspect ratio will always have less resolution and less brightness than images shown in native aspect ratio.
12. Similarly the native resolution also determines whether the projector is meant for data or video application. The data projects normally have a resolution of 1024 X 768 (SVGA - Super Video Graphic Array) and in some cases upto a maximum of 1280 X 1024 (SXGA - Super Extended Graphic Array). As against this the vide projectors need a native resolution of 720p or 1080p. 720p is ATSC (Advanced Television Systems Committee) high definition 1280 and 720 progressive scan format where a complete frame of video is delivered at either 60, 30 or 24 frames per second, while 1080p is ATSC high definition 1920 X 1080 interlaced video format where a frame of video is delivered in two fields. The first field contains odd lines of the image and the second field contains the even lines. In this resolution, each field is updated every 1/60th of a second resulting in 30 frames of video per second.
13. The video projectors also have a high contrast ratio upto 40,000 : 1, while the contrast ratio of a data projector is 2,000 to 4,000 : 1. Thus, the native aspect ratio, resolution and contrast determines whether the desired application of the projector is for data projection or video purposes.
14. The appellant submits that the projectors imported by them have native aspect of 4 : 3 and have lower native resolutions. (1024 X 768 1280 X 1024). The contrast ratio is also 2,000 to 4,000:1. Thus, the imported goods are only data projectors.
15. That the projectors are also capable of projecting video signals is not relevant. As stated supra, the imported projectors, though meant for data projections (native resolution), can support any other higher resolution, but the image is scanned down to the native resolution. In other words, the quality would be downgraded and there would not be clarity.
16. The appellant thus submits that reference to DVD and home-theatre system refers only to video projectors and hence the reliance placed on the same is incorrect.
17. The goods are classifiable under Tariff Item 8528 61 00 as these projectors are principally meant for used in an automatic data processing system.
18. The appellant further submits that prior to the amendment of Heading 8528 with effect from 01.01.2007, the impugned goods merit classification as an output device of an automatic data processing (ADP) system. It follows that when separate entries were created under heading 8528, they are appropriately covered under 8528 61 00 which is applicable to the projectors of a kind solely or principally used in an automatic data processing machine, instead of the residual entry of 8528 69 00.
19. The appellant submits that India is a signatory to the Information Technology Agreement. The classification adopted by the Customs officers for these projectors has resulted in the frustration of the ITA in relation to these products. Thus, the object of the exemption notification No. 24/2005 - Cus. is frustrated. Consequently, India s undertaking to the WTO is also annulled. Hence, the impugned order is not sustainable and the same deserves to be set aside.”
2. Shri V.V. Hariharan, learned Jt. CDR states that the lower appellate authority has based his decision on the ground that the catalogue of the impugned goods indicates that the same also had video compatibility and can play DVDs. However, he fairly states that when the impugned goods were classified in 12 cases by the original authority under Heading 8528 61 00, the exemption under Notification No. 24/2005 as amended could not have been denied since the said notification covered all goods falling under the said sub-heading.
3. After hearing both sides and perusal of case records, we find that as per Chapter Note 5 [CandD] to Chapter 84 the monitors and projectors, not incorporating television reception apparatus are excluded from being classified under Heading 8471 even though they are of the kind solely or principally used in an automatic data processing system. We also find that projectors of a kind solely or principally used in an automatic data processing system of Heading 8471 are classified under sub-heading 8528.61. In fact, the impugned goods have been classified by the original authority in respect of 12 out of 13 cases under Heading 8528.61. Only in one case the same has been classified by the original authority in the residual category 8528.69. The impugned exemption Notification No. 24/2005 dated 1.3.2005 as amended during the relevant period exempts all goods falling under sub-heading 8528.61. The description under the sub-heading 852861 uses the expression of a kind solely or principally used. From the arguments advanced before us as well as from the details furnished, we find that the impugned projectors are principally used for data projection being connected to either a laptop or a desktop computer. DVDs can also be played from the DVD drive of a laptop and desktop computer through the projector apart from projecting power point presentations, word files, excel charts etc. It seems to have weighed with the lower appellate authority that the projectors also had video compatibility as mentioned in the relevant catalogue. But such video compatibility does not come in the way of the impugned goods being classified under SH 8528.61 so long as the principal uses all such projectors with laptop and desktop computer systems is not doubted as the sub-heading covers both sole use as well as principal use. Looking at the features of the impugned data projectors imported by the appellants, we have no doubt in our mind that the same merit classification under SH 852861 and automatically become entitled to exemption under Notification No. 24/2005 as the same exempts all goods under the said sub-heading. Hence, we set aside the impugned order and allow all the 13 appeals.