Classification of ‘Data Projector’ for use in schools, business meetings

In re Audio Distribution House Pvt. Ltd. (CAAR Mumbai)

CAAR Rule that ata Projector (Model — ZH 350, ZW350e, ZX 350e) are classifiable under sub-heading 8528 62 00 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.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI

M/s. Audio Distribution House Pvt. Ltd. (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 the CAAR, Mumbai on 18.11.2022, along with 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 mentioned in pars 1 from China. As per the applicant, the subject goods are data projectors used in schools, business meetings, and conferences, and are principally meant for use with an Automatic Data Processing System (APDS). 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. The applicant stated that though in respect of the models, ZH 350, ZW350e, ZX 350e, the aspect ratio can be enhanced to 16:9 or 16:10, the default aspect ratio for its effective functioning is 4:3 and the enhancement capability is only superficial. These devices support connections such as HDMI X 2, Audio Out, USB-A (5V/1.5A) and RS232 and has computer compatibility up to, WUXGA, 1080P UXGA, SXGA+, SXGA, WXGA+, WXGA, 720P, XGA, SVGA and VGA. They have proposed CTH 8528 62 00 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 along with 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, classifiable under CTH 85286900. 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) FT T 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 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, Mumbai, Zone H. The application was forwarded to the jurisdictional Commissioner of Customs for comments vide this office letter dated 25.11.2022. However, no reply has been received.

4. The application was listed for hearing on 21.12.2022. The applicant was represented by Shri Hari Radhakrishnan, Advocate. No one appeared on behalf of the jurisdictional Commissioner. Shri Radhakrishnan explained the features of three models of data projectors proposed to be imported by them. He explained that in respect of the 3 models, the user can change the aspect ratio as per their requirements.. He explained that the brightness and contrast features of these models are that of data projectors and not video projectors.

5. 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. No reply has been received from the jurisdictional Commissioner. In the absence of any such comments on the impugned subject matter, I proceed to render advance rulings on the basis of available information. The issue at hand is to decide the classification of the data projectors ZH 350, ZW350e, ZX 350e 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

5.1 Rule 1 of the General Rules of Interpretations lays down that the titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes. The relevant CTI-Is are reproduced below:

CTH 8528 covers, “Monitors and projectors, not incorporating television reception apparatus, reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus.

The third I-dash sub-heading falling under CTH 8528620(1 covers, “Projectors; capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.

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 6 (E) to Chapter 84 states that, “Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific _.fitnction 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 specification for subject goods lists computer compatibility standards of the products, namely, WUXGA, 1080P UXGA, SXGA+, SXGA, WXGA+, WXGA, 720P, XGA, SVGA and VGA. 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. In the case of Epson India Pvt. Ltd. V. Commissioner reported in 2019 (366) Pl^. T 847 (Tri- Chennai), the Hon ‘ble Tribunal, Chennai held that the projectors which are principally used for data projection by being connected to either a laptop or a desktop computer shall be eligible to be classified under CTH 8528 61 00 (erstwhile tariff heading for projectors capable of directly connecting to and designed for use with an automatic data processing system of heading 8471).

5.2 The projectors under consideration have got certain additional ports such HDMI x 2, Audio Out, USB-A (5V/1.5A), RS-232, etc., which make them capable of being a video projector and consequently classifiable under CTH 85286900 also. GRI Rule 3 states that “the heading which provides the most specific description shall be preferred to headings providing a more general description”. The website, https://www.optoma.com/ap/product, of the manufacturer of the impugned devices were referred to understand how these projectors are marketed by the manufacturer. These are listed under the business/education category of projectors on the said website. The product description present on the website for the subject goods are reproduced here:

“Designed for maintenance-free continuous operation, the projectors can be installed in virtually any orientation. It has a built-in speaker and its laser technology delivers up to 30,000 hours of maintenance-free laser light source. They are geared for meeting rooms, medium —sized exhibition venues, events or tradeshows and maintains excellent image quality as brightness and colour saturation is preserved for a long time.

5.3 From the above description, it is clear that these are marketed as data projectors only. From the product catalogues and information available on the websites, it is clear that data projectors are principally meant for use in/with an automatic data processing system. They are designed to project in places like conference rooms, business meetings, financial institutions, tradeshows, exhibition venues etc. with connectors matching that of a laptop/ computer. They possess both indoor and outdoor projection capability. The projectors proposed to be imported by the appellant have got additional features such as an HDM1 x 2, Audio Out, USB-A (5V/1.5A), RS-232, etc. along with the capability to adjust the aspect ratio in 3 models. The additional ports give additional utility in the form of an audio-video display and the ability to adjust the aspect ratio to 16:9/16:10 is for adaptability purposes. The differentiating features of data projectors compared to that of video projectors are discussed in table 1, which substantiate 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 sub-heading 8528 62 00. Reliance is placed upon Commissioner of Customs v. Vardhman Technology Pvt. Ltd, (301) ELT 42, where it was held that the projectors merely having additional function cannot be denied classification under CTH 8528 61 00 (this is an erstwhile tariff heading for projectors capable of directly connecting to and designed for use with an automatic data processing system of heading 8471, presently it is sub-heading 8528 62 00). Therefore, the goods under consideration are classifiable under sub-heading 8528 62 00.

6. Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended, exempts all goods of a kind solely or principally used in an automatic data processing system of 8471 and falling under heading 8528 62. As the impugned goods are held as classifiable under sub-heading 8528 62 00 and are principally used in/with automatic data processing system they are entitled to the exemption.

7. In view of the foregoing discussions, I rule that the Data Projector (Model — ZH 350, ZW350e, ZX 350e) are classifiable under sub-heading 8528 62 00 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.