In re UFO Movies India Ltd (CAAR Mumbai)
M/s UFO Moviez India Ltd. applied for an advance ruling before the Customs Authority for Advance Rulings (CAAR), Mumbai, to determine the correct classification of digital cinema projectors under the Customs Tariff Act, 1975. The applicant contended that digital cinema projectors, used for projecting digital films, should be classified under tariff item 85286900, which covers monitors and projectors not incorporating television reception apparatus. The company highlighted that these projectors employ Digital Light Processing (DLP) technology and are compliant with Digital Cinema Initiative (DCI) standards. It also cited a prior ruling in the case of Ingram Micro India Pvt Ltd, where projectors were classified under heading 8528. However, the applicant noted that some industry players classify similar digital projectors under tariff item 90072090, which pertains to cinematographic projectors, resulting in a lower Integrated Goods and Services Tax (IGST) rate of 18% instead of 28%.
In response, the Commissioner of Customs at the Air Cargo Complex, Mumbai, argued that cinematographic projectors are specifically covered under tariff heading 9007, whereas the projectors classified under heading 8528 are intended for automatic data processing machines. The Commissionerate recommended classifying digital cinema projectors under CTH 85286200, aligning them with digital display technologies rather than traditional cinematographic equipment. During the hearing, the applicant reiterated its position but requested additional time to respond to the department’s arguments. After reviewing the submissions, the CAAR determined that the classification should be based on the legal framework and the product’s function. The ruling acknowledged that digital cinema projectors receive encrypted Digital Cinema Packages (DCPs), decode the content, and project images using advanced DLP or SXRD technology. The final classification decision was made considering the technical and legal aspects of the case.
