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2021 (12) TMI 1473 - AAAR - CustomsClassification of imported goods - data projector (Optoma SA520) - to be classified under CTH 85286200 or under CTH 85286900? - applicability of Sr' No' 17 of Notification No. 24/2005-customs. dated 01.03.2005, as amended - HELD 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. 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 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 product data sheet lists computer graphics compatibility standards of the product, namely, WUXGA, UXGA, WXGA, SXGA , SXGA, XGA, SVGA, VGA resized, ESA, PC and Mac. Further, the 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. The projector under consideration has got certain additional ports such as HDMI, audio, composite, etc. Further, the product is compatible with an aspect ratio of 16 9, though the aspect ratio of 4 3 is native. These facts make it capable of being a video projector and consequently classifiable under CTH 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 - The projector imported by the applicant has got additional features such as composite port, HDMI port etc. Apart from this, it is also compatible with the 16 9 aspect ratio. The additional ports and compatibility with the 16 9 aspect ratio give additional utility in the form of an audio-video display. The differentiating features of data projectors compared to that of video projectors are discussed in table 1, which substantiates that the principal use of impugned goods, based on functions and features, is with automatic data processing machines. The presence of additional features cannot dis-entitle the impugned goods from classification under CTH 85286200. Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended, exempts all goods under subheading 85286200 of kind solely or principally used in an automatic data processing system of heading 8471. The impugned goods are solely or principally used with a computer or laptop, i.e., an automatic data processing machine. Therefore, the goods under consideration are entitled to the exemption. The imported goods are classifiable under sub-heading 85286200 of the first schedule to the Customs Tariff Act, 1975 and would be eligible to avail benefit of Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended.
Issues Involved: Classification of data projector (Optoma SA520) and applicability of Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended.
Detailed Analysis: 1. Classification of Data Projector (Optoma SA520): The applicant, a private limited company engaged in trading, seeks to import data projectors from China. The primary issue is whether these projectors fall under sub-heading 85286200 or 85286900 of the Customs Tariff. The applicant argues that the projectors are designed to function with an automatic data processing system, such as a computer or laptop, and are primarily used in well-lit places like conference rooms and business meetings. They propose sub-heading 85286200, which includes projectors capable of connecting to an automatic data processing system. The applicant compares their device with home theatre/video projectors, which generally support higher resolutions and contrast ratios, and are classified under sub-heading 85286900. They assert that their projectors, having additional features like HDMI/composite/S-Video ports, are designed primarily for use with automatic data processing systems. 2. Eligibility for Nil Rate of Duty: The applicant claims eligibility for a nil rate of duty under Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended. This notification exempts goods under sub-heading 85286200 that are solely or principally used in an automatic data processing system of heading 8471. 3. Jurisdictional Comments: The application was forwarded to the jurisdictional Principal Commissioners of Customs for comments, but no reply was received. The applicant's advocate explained that different views on classification by customs authorities necessitated this advance ruling. 4. Analysis by the Authority: The authority considered all materials and submissions, noting the absence of comments from the jurisdictional Principal Commissioner. The classification of the data projector (Optoma SA520) and the applicability of the notification were examined based on available information. A projector's classification depends on its compatibility with input devices and its ability to project images accurately. Business/data projectors are generally brighter, have a lower contrast ratio, and match computer or laptop screens. Video/home theatre projectors, classified under CTH 85286900, are used in smaller, darker rooms, have high contrast ratios, and support high resolutions. The authority referred to Rule 1 of the GI Rules, which states that classification should be determined according to the terms of the headings and any relative Section or Chapter Notes. CTH 85286200 covers projectors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471. The product data sheet and the manufacturer's website indicate that the projector is marketed as a business projector, designed for use in business and education environments. 5. Additional Features and Classification: The projector has additional ports such as HDMI and audio, and is compatible with a 16:9 aspect ratio. However, these additional features do not disqualify it from classification under CTH 85286200, as the principal use remains with automatic data processing machines. Reliance is placed on previous rulings, such as Vardhaman Technology P. Ltd., where projectors with additional functions were still classified under CTH 85286100. 6. Applicability of Notification No. 24/2005-Customs: Sr. No. 17 of Notification No. 24/2005-Customs exempts goods under sub-heading 85286200 that are used solely or principally with an automatic data processing system. The impugned goods meet this criterion and are therefore entitled to the exemption. 7. Similar Ruling: A similar ruling was made in another advance ruling application by the same applicant for a different model (Optoma X400LVe), where the classification and applicability of the notification were examined in detail. The conclusions in that ruling apply equally to the present case. Conclusion: The imported goods are classifiable under sub-heading 85286200 of the first schedule to the Customs Tariff Act, 1975, and are eligible for the benefit of Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended.
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