In re Rashi Peripheral Limited (CAAR Mumbai)
Rashi Peripheral Limited (hereinafter referred to as ‘the applicant’, in short) filed an application for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR, in short). The said application was received in the secretariat of CAAR, Mumbai on 04.05.2023, alongwith its enclosures in terms of Section 28H (I) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’). The applicant is seeking advance ruling on the classification of ‘Data Projector’ (Model — ZH 350, ZW350e, ZX 350e) (hereinafter referred to as ‘subject goods’), proposed to be imported and applicability of Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended.
2. The applicant is a registered private limited company engaged in the trading business. They intend to import data projectors (Model — ZH 350, ZW350e, ZX 350e) from China. As per the applicant, the subject goods are used in schools, business meetings, and conferences, and are principally meant for use with an Automatic Data Processing System (APDS), alongwith additional features of HDMI port, S-Video port, etc. 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 to enable them to function in well-lit places. The model ZH 350 has a native resolution of 1920 x 1080 (HD), and supports computer signal up to WUXGA. Whereas, the model ZX 350e has a native resolution of 1024 x 768 (XGA) and model ZW 350e has a native resolution of 1280 x 800 (WXGA) and supports computer signal up to UXGA. The products under consideration have brightness specifications in the range of 3500-4000 ANSI lumens. The contrast ratio of the projectors in consideration is 30000:1. The native aspect ratio of the products in question is 4:3. These devices support connections such as HDMI X 2, Audio Out, USB-A (5V/I .5A) and RS232 and has computer compatibility upto, WUXGA, 1080P UXGA, SXGA+, SXGA, WXGA+, WXGA, 720P, XGA, SVGA and VGA. They have proposed CTH 85286200 as an appropriate classification, which states, ‘Projectors – capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471’, alongwith eligibility benefit of exemption under Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended.
2.1 The applicant has compared the subject goods with home theatre projectors or video projectors. As stated by the applicant a home theatre projector, generally supports high resolution (4K UHD 3840*2160). They are characterised by high contrast ratio in the range of 100000: 1 and 1200000:1 and possess a native aspect ratio of 16:9. Therefore, there are significant variations between the features of a data projector and a video projector. It is stated that the impugned devices are not home theatre projectors. According to the applicant, subject goods are data projectors, which are designed primarily to be used with an automatic data processing system. In support of the above, the applicant has submitted the following case laws: –
Epson India Pvt. Ltd. v. Commissioner, (366) ELT 847 (Tri-Chennai);
Commissioner of Customs v. M/s. Epson India Pvt. Ltd., (366) ELT A173 (SC);
Commissioner of Customs v. Vardha man Technology Pvt. Ltd., (301) ELT 427;
M/s. Casio India Co. Pvt. Ltd, V. Commissioner of Customs, (Tribunal Delhi), vide Final order dated 55283/2016;
Sony India Pvt. Ltd V. Commissioner of Customs and Central Excise, New Delhi, (370) ELT 1774 (Tri-Del).
2.2 The applicant has submitted in Sr. No. 11 of CAAR 1 form, that the question raised by them in the present application is pending in respect of different models of projectors imported by the applicant; that they have been issued order-in-original No. 142/2022-23/ADC/Gr. VA/CAC/JNCH dated 23.05.2022 for the same; that an appeal has been filed against the said order on 29.07.2022 and the same is pending before the Commissioner of Customs (Appeals), Nhava Sheva.
2.3 The applicant further stated that they are eligible to claim a nil rate of duty on impugned goods as per Sr. No. 17 of Notification No.24/2005-Customs, dated 01.03.2005, as amended.
3. In their CAAR – I form, the applicant has declared that they would import through the jurisdiction of Principal Commissioner/ Commissioner of Customs, Nhava Sheva-V. The application was forwarded to the jurisdictional Commissioner of Customs for comments, however no reply has been received.
4. The application was listed for hearing on 17.05.2023. The applicant was represented by Shri Gokulraj, Advocate. No one appeared on behalf of the jurisdictional Commissioner. Shri Gokulraj explained the CAAR 1 application in support of the applicants claim for classification and exemption benefit to data projectors. He elaborated on the features of three models of data projectors proposed to be imported by them. He explained that the brightness and contrast features of these models are that of data projectors and not video projectors. During personal hearing attention was invited to the following:
i. Contrast ratio displayed on the Optoma website is 300000:1, whereas the contrast ration declared by the applicant in their CAAR 1 application is 30000:1.
ii. Why the models covered under present CAAR 1 applications are different from those covered under ongoing dispute with Nhava Sheva-V Commissionerate
The applicant requested for a time period of two weeks to clarify the above mentioned issues. The same was granted.
5. Subsequently the applicant submitted rejoinder dated 25.05.2023, providing additional written submission, with respect to the points raised during the hearing. The same is verbatim reproduced below:
1. It is submitted that during the personal hearing held on May 17, 2023, the Hon’ble Authority for Advance Ruling had raised a query that the website of the foreign supplier viz., M/s.Optoma Corporation had indicated that the contrast ratio of the projectors of Models ZX350e, ZW350e and ZH350 is 3,00,000:1. It was indicated that the catalogue of the models enclosed with the application for advance ruling indicated the contrast ratio as 30,000:1. The applicant was called upon to explain the difference.
2. In their rejoinder the applicant has submitted that the foreign supplier, M/s. Optomo Corporation have now issued a clarification dated 25.05.2023, stating that there are two contrast ratios, one static and the other dynamic and the contrast mentioned in the website was the dynamic contrast ratio of the data projector. It is clarified that dynamic contrast ratio is the luminosity ratio comparing the brightest and darkest shade the system is capable of producing over time. On the other hand, static contrast, which is also called the native contrast ratio is the ratio of white and black measurements from the same image at the same time. This is considered the true contrast of the projector. In the catalogue submitted along with the application for advance ruling, the static contrast ratio of the projection as mentioned, which is 30,000:1.
3. It is submitted that there is a wide difference between the static and dynamic contrast ratio of a data projector when compared with a video projector. For instance, in the video projectors, the static contrast ratio is in the range of 1,80,000:1 and the dynamic contrast ratio is 18,00,000:1 whereas in a data projector the static contrast ratio is 30,000:1 and the dynamic contrast ratio is 3,00,000:1. This has been explained in the clarification letter dated 25.05.2023 of M/s. Optoma Corporation.
4. It is submitted that with the advancement in technology, the data projectors that are currently manufactured are having a laser based light source as compared to the earlier projectors which are lamp based. Therefore, the laser based data projectors tend to have higher dynamic contrast ratio. However, it may kindly be appreciated that when these layer based data projectors are compared with the video projectors, the difference in the ratio between the standard and dynamic contrast ratio is very wide.
For the above mentioned reasons, it submitted that the products in question are still data projectors having the above static and dynamic contrast ratio, which is still lower than the static and dynamic contract of the video projector and, it is therefore humbly prayed that the product in question may be classified under CTH 8528 6200.
6. I have considered all the materials placed before me for the subject products. I have gone through the submissions made by the applicant during the personal hearing and the additional submission submitted vide rejoinder dated 25.05.2023. No reply has been received from the jurisdictional Commissioner. In the absence of any such comments on the impugned subject matter, I proceed to examine the application on the basis of available information. The issue at hand is to decide the classification of the data projectors and the applicability of Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended. 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 falling under CTH 85286900 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
