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2018 (3) TMI 364 - AT - CustomsClassification of imported goods - Business Projectors - benefit of N/N. 24/2005-Cus. dated 1.3.2005, N/N. 2/2008 dated 1.3.2008 at S. No. 63 and N/N. 29/2010-Cus. dated 27.2.2010 - the department entertained a view that the goods are rightly classifiable under 85286900 and are not eligible for exemption as per above notifications - Held that - The Tribunal in the case of Vardhaman Technology P. Ltd. 2013 (8) TMI 271 - CESTAT MUMBAI had specifically analyzed the issue as to whether the projectors having other features like video port, S-video port, HDMI, RCA etc. would be classifiable under 852861900, and it was held in the case that The projection system cannot be used in isolation but replaces the functionality of a monitor. The projectors merely having additional function cannot be a ground for classifying it other than 85286100, they cannot be said to be meant for use solely or principally in an automatic data processing system of heading 8471 The impugned data / business projectors are classifiable under 85286100 - demand set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of imported Business Projectors. 2. Eligibility for exemption under specific customs notifications. 3. Demand of differential duty, interest, and imposition of penalties. Detailed Analysis: 1. Classification of Imported Business Projectors: The appellants imported various models of Business Projectors and classified them under CTH 85286100, claiming they are principally used with an Automatic Data Processing (ADP) system. The department contested this classification, asserting that the projectors should fall under CTH 85286900 as they are capable of receiving signals from multiple sources, not solely ADP systems. The appellants argued that their projectors are Business Projectors designed for use in business environments, with features such as: - Optical lens dependent on audience size. - Low contrast ratio. - Resolution matching PC screens with high brightness. They contrasted these with home theatre projectors, which have: - High contrast ratios for movies and gaming. - Resolutions of 480P, 540P, 720P, and 1080P. - Connectors for audio and video equipment. The key differentiators highlighted were aspect ratio, resolution, contrast ratio, and lumen (brightness). The appellants maintained that additional features like USB, HDMI, and built-in speakers do not detract from the principal use with ADP systems. 2. Eligibility for Exemption Under Specific Customs Notifications: The appellants claimed exemptions under various notifications: - Notification No. 24/2005-Cus. dated 1.3.2005 at Sl. No. 17 for basic customs duty. - Notification No. 2/2008 dated 1.3.2008 at S. No. 63 for Additional Duty of Customs. - Notification No. 29/2010-Cus. dated 27.2.2010 for SAD at nil rate. The department's position was that the projectors, being capable of receiving signals from sources other than ADP systems, do not qualify for these exemptions. The Commissioner (Appeals) upheld this view, emphasizing the project's ability to function independently from ADP systems. 3. Demand of Differential Duty, Interest, and Imposition of Penalties: The original authority confirmed the demand for differential duty, interest, and imposed penalties based on the reclassification of the projectors under CTH 85286900. The appellants contested this, citing previous Tribunal decisions supporting their classification under CTH 85286100. Tribunal's Findings: The Tribunal reviewed the technical specifications and catalogues of the imported projectors, noting that the additional features do not preclude their principal use with ADP systems. The Tribunal referenced several precedents, including: - M/s. Acer India (P) Ltd. Vs. Commissioner of Customs. - Commissioner of Customs, Mumbai Vs. Vardhaman Technology P. Ltd. - M/s. Casio India Co. Pvt. Ltd. Vs. Commissioner of Customs, New Delhi. These cases established that projectors with additional features like video ports, HDMI, and RCA connectors, if principally used with ADP systems, should be classified under CTH 85286100. Conclusion: The Tribunal concluded that the imported Business Projectors are classifiable under CTH 85286100, making them eligible for the claimed exemptions. The demand for differential duty, interest, and penalties was set aside, and the appeals were allowed with consequential benefits. Operative Portion: The impugned order was set aside, and the appeals were allowed with consequential benefits.
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