2025(06)LCX0387(AAR)

Viewsonic Technologies India Private Limited

decided on 16-06-2025

Customs Authority for Advance Rulings 

New Custom House, Ballard Estate, Mumbai - 400 001

E-MAIL: cus-advrulings.mum@gov.in

N.B.:

1. A copy of this order made under sub-section (2) of Section 28-1 of the Customs Act, 1962 is granted to the concerned free of charge.

2. Any appeal against this Advance Ruling order shall lie before the High Court of concerned jurisdiction, within 60 days from the date of the communication of such ruling or order.

3. The advance ruling pronounced by the Authority under Section 28 -1 shall remain valid for three years or till there is a change in law or facts on the basis of which the advance ruling has been pronounced, whichever is earlier.

4. Where the Authority finds that the advance ruling was obtained by the applicant by fraud or misrepresentation of facts, the same shall be declared void ab initio.

Advance Ruling

The present proceedings emanate from the Order dated 01.04.2025 passed by the Madras High Court in the case of M/s. Viewsonic Technologies India Private Limited Vs. The Customs Authority for Advance Rulings, Mumbai & Others [CMA No. 2268 of 2024] in the matter of Appeal filed under Section 28KA of the Customs Act, 1962 against the Ruling No. CAAR/Mum/ARC/97/2024 dated 10.07.2024 issued by the Customs Authority for Advance Rulings, Mumbai.

1.2 The applicant had earlier filed an application dated 14.08.2023 (received on 16.08.2023) before this Authority seeking an Advance Ruling on the classification of Data Projectors bearing Model Nos. PA503S-3, PA700S, PA700X, PA700W, and PS502X, as well as their eligibility for exemption benefit under Serial No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended.

The applicant vide their earlier application dated 14.08.2023 has submitted as under:

1.3 The applicant is a registered private limited company involved in the business of trading. They intend to import data projectors bearing model nos. PA503S-3, PA700S, PA700X, PA700W and PS502X.

1.4 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 (ADPS). 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 in such a way that enables them to function in well-lit places. The applicant is of the view that the subject goods are classifiable under CTH 8528 6200. The applicant is intending to claim the benefit of Nil rate of Customs Duty under exemption Notification No. 24/2005 (SI. No. 17, as inserted by Notification No. 67/2016 dated 31.12.2016.) dated 01.03.2005.

1.5 The applicant is of bonafide belief that the subject goods are rightly classifiable under 8528 6200. Therefore, the present application is being filed to ascertain the correct classification for the subject goods and the eligibility of the Notification No. 24/2005 dated 01.03.2005 as amended.

1.6 The subject goods are data projectors, which are designed primarily to be used with an Automatic Data Processing System, along with additional features of HDMI port, S-Video port, etc. It is submitted that the heading 8528 6200 clearly mentions that only projectors which are capable of connecting to and designed for use with an automatic data processing system of heading 8471 shall be classifiable under the said heading. Therefore, the more appropriate CTH is 8528 6200.

1.7 It is submitted that the products in question, namely Model Names - Model Names - PA503S-3, PA700S, PA700X, PA700W and PS502X. The models PA503S-3 and PA700S has a native resolution of 800x600 (SVGA) The models PA700X and PS502X have a native resolution of 1024x768 (XGA) and the model PA700W has a native resolution of 1280x800 (WXGA). The terms WXGA (Widescreen Ultra Extra Graphics Array) refers to a computer display standard. It is relevant to note that the resolution of home theatre projectors or video projectors is 4K UHD (3840*2160). Therefore, it is apparent that the projectors in question are not of a kind used as home theatre projectors or video projectors, even going by the resolution output. The contrast ratio of the projector in consideration is 28000:1, 12500:1 and 22000:1 whereas, the contrast ratio of home theatre/video projectors is in the range of 1,00,000:1 and 12,00,000:1. In addition, the native aspect ratio of the home theatre/video projectors is 16:9, whereas the native aspect ratio of the products in question is 4:3. The literature of all the five models are enclosed to the CAAR-1 application.

1.8 The applicant is placing reliance on the decision in Epson India Pvt. Ltd. V. Commissioner reported in 2019 (366) ELT 847 (Tri-Chennai). In the afore-said decision, the Hon'ble Tribunal, Chennai, had 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 6100 (erstwhile tariff heading for projectors capable of directly connecting to and designed for use with an automatic data processing system of heading 8471). The said decision has already been confirmed by the Hon'ble Supreme Court in Commissioner of Customs V. M/s. Epson India Pvt. Ltd. reported in 2019 (366) ELT A173 (SC).

1.9 The Hon'ble Tribunal, Mumbai, has held, in Commissioner of Customs V. Vardhaman Technology Pvt. Ltd., reported in 2014 (301) ELT 427, that the presence of video port, S-video port, HDMI, RCA etc. in the data projectors were insignificant, for the purpose for classification, when the primary function is to project data by connecting to an Automatic Data Processing System. In addition, the afore-said decision has been followed by the Hon'ble Tribunal, New Delhi, in M/s. Casio India Co. Pvt. Ltd. Vs. Commissioner of Customs, New Delhi, vide Final order dated 55283/2016.

1.10 It is also submitted that the principal bench of the Hon'ble CESTAT in the case of Sony India Pvt. Ltd. V. Commissioner of Customs and Central Excise, New Delhi reported in 2019 (370) ELT 1774 (Tri-Del) has held in Para No. 35 and 36, 40 and 41 as follows:

"35. The Commissioner has, notwithstanding, the judgments of the Supreme Court and the decisions of the Tribunal on this issue, concluded that the colour data projectors imported by Sony India would fall under 8528 69 00. This is very disturbing and a serious note needs be taken of such a deviation as it is expected of Adjudicating Officers to follow the binding decisions. At this stage, it also needs to be remembered that the Supreme Court, while dismissing the Civil Appeal filed by the Department to assail the order passed by the Tribunal in M/s. Epson India Pvt. Ltd., had also observed that there was no reason to deviate from the view expressed by the Tribunal which had followed the earlier decisions of the Tribunal in the matter in issue and the decisions had also attained finality, including on account of the dismissal of the two Civil Appeals by the Supreme Court.

36. The reason assigned by the Commissioner for not following the binding judgments of the Supreme Court and the decisions of the Tribunal is that the judgment of the Supreme Court in Dilip Kumar has rendered the earlier judgments of the Supreme Court and the decisions of the Tribunal as "not relevant and legally tenable". The findings of the Commissioner, on this aspect, have been reproduced in paragraph 9 of this Order, but it is considered appropriate to restate the findings in short and they are as follows:

(i) The judgments of the Supreme Court and the decisions of the Tribunal relied upon by the Appellant are based on the ratio of judgment of Supreme Court in Sun Export Corporation, Bombay v. Collector of Customs, Bombay [1997 (6) SCC 564 = 1997 (93) E.L. T. 641 (S C.)J;

(ii) In Sun Export, the Supreme Court observed that any ambiguity in a tax exemption provision or notification must be interpreted in favour of the assessee;

(iii) The Constitution Bench of the Supreme Court in Dilip Kumar observed that an exemption notification should be interpreted strictly and when there is ambiguity in an exemption notification, the benefit of such ambiguity must be interpreted in favour of the Revenue;

(iv) The Supreme Court in Dilip Kumar overruled its earlier decision in Sun Export. Thus, all the judgments of the Supreme Court and the decisions of the Tribunal relied upon stand overruled and "are not relevant and legally tenable "; arid

(v) The Appellant is, therefore, not entitled to the benefit of the exemption notification.

40. All that the Commissioner had to first examine was the classification of colour data projectors imported by the Appellant under 8528 61 00 as projectors of a kind "solely or principally " used in an ADP system of Heading 8471 or under 8528 69 00. This issue stood concluded in favour of the Appellant as the Tribunal had in clear terms held that the colour data projectors would fall under Heading 8528 61 00, and at least two Civil Appeals filed by the Department to assail the decisions of the Tribunal had been dismissed by the Supreme Court.

41. It is, thereafter, that the Commissioner had to examine whether the colour data projectors would be entitled to the benefit of the Notification dated 1 March, 2005. This Notification automatically grants exemption from payment of the whole of the Customs duty if the product is covered by the description specified in Column (3). All goods falling under 8528 61 are specified in Column (3) of the Table. It is only when there is any ambiguity in the Exemption Notification, that the Notification is required to be interpreted in favour of the Revenue. This is also what was noted by the Commissioner while referring to the judgment of the Supreme Court in Dilip Kumar for the Commissioner did note that the said judgment of the Supreme Court was in relation to ambiguity in an Exemption Notification. There is no ambiguity in the Exemption Notification dated lst March, 2005 and indeed none has been pointed out by the Commissioner in the impugned order. Reliance placed by the Commissioner on the judgment in Dilip Kumar is, therefore, misplaced, and it appears that reliance was placed only to overcome the binding decisions. ".

1.11 From the above decisions of the Hon'ble CESTAT, some of which have been affirmed by the Hon'ble Supreme Court and from the Advance Ruling mentioned above, it is apparent that the classification of color data projector has attained finality and there is no room for any doubt with regard to the fact that the goods are classifiable under 8528 6200 and is entitled to avail the benefit of the benefit of SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005.

1.12 The concerned jurisdictional Commissionerate i.e. Chennai-II through their letter dated 01.05.2024 issued vide F. No. CUS/APR/APPL/45/2024-GR 5A has inter-alia stated that:

i. The Data Projectors capable of directly connecting to and designed for use with an automatic data processing machine of heading 84.71, are to be declared under heading 85286200. From the technical literature provided by the applicant the listed models have S-Video port and/or HDMI connectivity and are having the capability of connecting to and designed for use with an automatic data processing machine of heading 84.71, and can be classified under 85286200.

ii. This Commissionerate is of the view that the subject goods are not eligible for exemption under SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005 as amended by Notification No. 67/2016-Cus dated 31.12.2016, as the subject goods have HDMI connectors and USB-type A connector in all the models, thereby having options to connect with Non-ADP machines as well; and are NOT of a kind used solely or principally used in an automatic data processing machine.

1.13 The applicant through their authorized representative vide their letter dated 27.05.2024 has submitted rebuttal on the comments dated 01.05.2024 wherein the applicant has categorically denied contention of the jurisdictional commissionerate and has submitted their justifications regarding the applicability of benefit under Sr. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005 as amended. The submissions are as below:

1.13.2 It is submitted that the Department has contended that the subject goods are ineligible to claim the benefit of the Notification dated 01.03.2005, only because the subject goods has HDMI and USB- Type A connectors in all the models. However, the Department has not provided the reason or observation as to how
the presence of these above-mentioned connectors changes the nature of the subject products. It is submitted that the subject goods are 'Data Projectors' which are capable of connecting to Automatic Data Processing machine of the heading 8471. The Department themselves has agreed in comments to Question 1 at paragraph 3 that the subject products are connected to and designed for use with an Automatic Data Processing machine through HDMI connectivity. The use of HDMI ports are for connecting to an Automatic Data Processing machine and therefore, the observations in the comments that the HDMI ports are used to connect to a non-ADP machine is absurd.

1.13.3 With respect to the presence of USB Type - A port, it is submitted that the Department has failed to appreciate that the USB Type A port is used as a power delivery in the subject products and the same is clear from the specification sheet produced along with the application. It can be seen in the Specification sheet that "USB Type A (Power): 1 (5V/2A)" is reflected under the heading 'Output', where other outputs such as Monitor out, Audio out and speaker is mentioned. Through the said port, the electrical power with a maximum power of 5 Volt and 2 Amps can be supplied and devices like keyboard, mic, mouse, etc. can be connected. Further, the subject projectors can be connected to an Automatic Data Processing machines through USB port for troubleshooting minor errors and updating software. However, the said ports cannot be used as a video port and further, the subject goods cannot deliver its functions without connecting to an Automatic Data Processing machines.

1.13.4 Without prejudice to the above-submissions, it is submitted that SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005 is clear that the said exemption to BCD applies to products falling under CTH 8528 42, 8528 52 or 8528 62, which of a kind solely or principally used in an Automatic Data Processing System of heading 8471. SI. 17 of the said Notification reads as under:

"All goods of a kind solely or principally used in an automatic data processing system of heading 8471''.

1.13.5 The above entry consciously employs the word 'of a kind'. The expression 'of a kind' widens the scope of the words, immediately succeeding it. The meaning of the term 'of a kind used in' has been succinctly explained in the decision of the Hon'ble Tribunal in the case of Uday Traders vs. Collector of Customs, Nhava Sheva reported in 1996 (82) ELT 506 (Tri). The Hon'ble Tribunal held as follows:

"5. Heard the submissions of both sides. On a careful consideration we find that the only point for determination before us is as to how to interpret the words 'of a kind used in'. These words can be sub-divided into two groups. The first group is 'of a kind' and the second group can be 'used in'. Once we say that the goods are used we want to confine it to that the person importing the goods must use the goods in the item following the word 'in'. In the instant case it is not only the words 'used in' but also 'of a kind'. We find that 'of a kind' widens the scope of the term 'used in' meaning thereby that the use of the imported item in homoeopathic medicines is one of the several uses. The admitted position in the instant case is that 'Lactose' is used not only in homoeopathic medicines but is put to a number of other uses such as preparation of food (Sic) etc. We therefore hold that either the condition of actual user or the condition of end-use certificate is not built in the notification and therefore the benefit of this notification cannot be denied. In view of this finding the impugned order is set aside and all three appeals are allowed. Consequential relief, if any, will be admissible to the appellants in accordance with law. "

Therefore, SI. 17 of Notification dated 01.03.2005 should be interpreted to mean that it not only includes projectors which are solely used along with an ADP but also includes projectors, which are principally traded and bought by a common man to be used along with an ADP, though such projectors may have additional or independent functionality.

1.13.6. It is submitted that the second point to be considered is that SI. 17 of the above notification also employs the word 'Principally'. Therefore, SI. 17 will also include projectors, which are mainly used along with an ADP, but may also be able to function independently. It is submitted that if such an interpretation is not accorded to SI. 17 of the above Notification, then the usage of the word 'principally' in the notification would have to be considered as redundant. It is submitted that it is a well settled principle of interpretation that every word employed in the legislation has to be given its effect and its true meaning and any interpretation which makes any words employed in legislation as redundant or otiose has to be eschewed. Reliance is placed on the decision of the Hon'ble Supreme Court in the case of Bansal wire Industries Limited vs. State of Uttar Pradesh, reported in 2011 (269) ELT 145 (SC). The relevant paragraphs are reproduced below:

"34. It is a settled principle of law that the words used in the section, rule or notification should not be rendered redundant and should be given effect to. It is also one of the cardinal principles of interpretation of any statue that some meaning must be given to the words used in the section. Expression "Wire rods and wires " which is mentioned in item no. (xv) would not and cannot cover the expression "tools, alloy and special steels" of entry no. (ix) nor it would refer to the expression "Iron and Steel" as each item used in entry nos. (ix) and (xv) are independent items not depending on each other at all as has been held in the case of Pyare Lai Mehrotra (supra).

35. In arriving at the aforesaid conclusion, we find support from the decision of this Court in Union of India v. Hansoli Devi reported in (2002) 7 SCC 273 wherein this Court held that it is a cardinal principle of construction of a statute that when the language of the statute is plain and unambiguous, the court must give effect to the words used in the statute.

36. Besides, in a taxing Act one has to look merely at what is clearly said and there is no room for any intendment. In a taxing statute nothing is to be read in, nothing is to be implied, one can only look fairly at the language used. "

1.13.7 It is also a well settled principle of interpretation that an exemption notification has to be construed strictly. However, once a subject falls within the ambit of the Notification, liberal interpretation has to be given to the Notification wordings so as to ensure that the said subject is granted the benefit. Reliance is placed on the decision of the Hon'ble Supreme Court in the case of Bharat Diagnostic Centre vs. Commissioner of Customs, reported in 2014 (307) ELT632 (SC) and relevant paragraph reads as follows:

"5. With regard to the interpretation and construction of a notification granting exemption, it is settled that at the first instance, strict interpretation would apply, that is to say in the case of ascertaining its applicability. Thereafter, the Court may adopt the liberal approach within the particulars of the said notification. The case of Gammon (I) Ltd. v. Commr. of Customs, (2011) 12 SCC 499 = 2011 (269) E.L.T. 289 (S.C.), reiterated the well-settled position of law that a provision providing for an exemption has to be construed strictly. The following cases would, further make the position of law clear on this point.

6. In the case of Commr. of Customs (Imports) v. Tullow India Operations Ltd., (2005) 13 SCC 789 = 2005 (189) E.L. T. 401 (S.C.), it was held that:

"... The principles as regards construction of an exemption notification are no longer res Integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning where for the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed liberally. An eligibility criteria,therefore, deserves a strict construction, although construction of a condition thereof may be given a liberal meaning. "

7. In the case of A. P. Steel Re-Rolling Mill Ltd. v. State of Kerala, (2007) 2 SCC 725, it was held that

"... The general principles with regard to construction of exemption notification are not of much dispute. Generally, an exemption notification is to be construed strictly, but once it is found that the entrepreneur fulfils the conditions laid down therein, liberal construction would be made. "

8. Further in the case of Collector of Customs (Preventive) v. Malwa Industries Ltd., (2009) 12 SCC 735 = 2009 (235) E.L.T. 214 (S.C), it was held that:

"... An exemption notification should be read literally. A person claiming benefit of an exemption notification must show that he satisfies the eligibility criteria. Once, however, it is found that the exemption notification is applicable to the case of the assessee, the same should be construed liberally."

9. While defining or explaining the meaning of a word or phrase in a statute, the word 'include' is generally used to enlarge the meaning of those words or phrases. When the word 'include' is used as such, those words or phrases must be construed as comprehending not only such things as they signify according to their natural import or as per common parlance, but also those things which the interpretation or explanation clause declares that they shall include. This principle has been enumerated in several decisions of this Court. "

In the present case, even the Department admits that the goods fall under CTH 8528 6200, which deals with projectors, which are capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471. Therefore, admittedly the subject projectors are principally used along with an ADP. Consequently, the subject projectors fall under the ambit of SI. No. 17 of Notification No. 24/2005-Cus dated 01.03.2005

1.13.8 It is further submitted that mere presence of USB ports does not change the principal usage of the products in question. The presence of the said ports is for convenience of the users and is results of the advancement in technology. An identical dispute came up for consideration before the Hon'ble CESTAT, Principal Bench in the case of Benq India Private Limited in Final Order No. 50832-50843/2022 dated 12.09.2022 and the Hon'ble Tribunal has held that the addition of multiple ports in the goods will not take away the basic nature of the goods, which is to work in conjunction with Automatic Data Processing Machine and ordered in favour of the importer. It is submitted that an identical stand was taken by the Hon'ble CESTAT, Hyderabad Bench in the case of AVECO Viscomm Private Limited reported in 2018 (362) E.L.T. 624 (Tri. -Hyd.). The said findings squarely apply to the present facts as well.

1.13.9 It is submitted that an identical issue came up for consideration before the Principal Bench of the Hon'ble CESTAT in the case of Sony India Pvt. Ltd. Vs. Commissioner of Customs & Central Excise, New Delhi reported in 2019 (370) E.L.T. 1774 (Tri. - Dei). The Hon'ble Tribunal held as follows:
 

"25. In M/s. Epson India Pvt. Ltd. v. Commissioner of Customs, Chennai [2018 (3) TMI 364-CESTAT, Chennai = 2019 (366) E.L.T. 847 (Tri. - Chennai)] the same view was again taken after referring to the earlier decisions of the Tribunal in Vardhaman Technology, M/s. Acer India (P) Ltd. and M/s. Casio India Company Ltd.
"Delay condoned

26. It also needs to be noted that Supreme Court dismissed Civil Appeal filed by the Revenue against the decision of the Tribunal in M/s. Epson India Pvt. Ltd. [2019-TIOL-219-SC-CUS = 2019 (366) E.L. T. A173 (S.C.) - (Commissioner of Customs v. M/s Epson India Pvt. Ltd) on 21 January, 2019. The judgment of the Supreme Court is reproduced below' :

We find no reason to deviate from the view expressed by the Appellate Tribunal whilst following the earlier decisions on the matter in issue, which had attained finality including on account of dismissal of two appeals by this Court. "

27. A perusal of the aforesaid order of the Supreme Court passed in the Civil Appeal filed by the Department to assail the order of the Tribunal in M/s. Epson India Pvt. Ltd. would show that the Supreme Court saw no reason to deviate from the view expressed by the Tribunal, particularly, when the Tribunal had decided the matter following earlier decisions of the Tribunal which had attained finality, including on account of the dismissal of the two Civil Appeals by the Supreme Court.

28. In view of the aforesaid judgments of the Supreme Court and the decisions of the Tribunal, it has to be held that the colour data projectors imported by Sony India are classifiable under Heading 8528 61 00.

29. Learned Authorised Representative of the Department, however, made an attempt to support the impugned order of the Commissioner by placing reliance on the Explanatory Notes to the Harmonised System of Nomenclature contained in Chapter 85. The relevant provisions, on which reliance was placed by Learned Authorised Representative of the Department, are reproduced below:

"85.28 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.

- Projectors:

8528 61— Of a kind solely or principally used in an automatic data processing system of heading 8471

------------------

------------------

-----------------

(A) MONITORS OF A KIND SOLELY OR PRINCIPALLY USED IN AN AUTOMATIC DATA PROCESSING SYSTEM OF HEADING 84.71

This group includes Cathode Ray Tube and non-Cathode Ray Tube (e.g., flat panel screen) monitors which provide a graphical presentation of the data processed. These monitors are distinguishable from other types of monitors (see (B) below) and from television receivers. They include:

(1) Those monitors which are capable of accepting a signal only from the central processing unit of an automatic data processing machine and, therefore, are not able to reproduce a colour image from a composite video signal whose waveform conforms to a broadcast standard (NTSC, SEC AM, PAL, D-MAC, etc.,). They are fitted with connectors characteristic of data processing systems (e.g., RS-232C interface, DIN or SUB-D connectors) and do not have an audio circuit. They are controlled by special adaptors (e.g., monochrome or graphics adaptors) which are integrated in the central processing unit of the automatic data processing machine. "

30. The contention of the Learned Authorised Representative of the Department, based on the aforesaid, is that what is stated for monitors would also apply for projectors and so Projectors which are capable of accepting a signal only from the central processing unit of an automatic data processing machine, can be classified under 8528 61 00.

31. It is not possible to accept the said contention of the Learned Authorised Representative of the Department. What is included in (A) has been stated and it is monitors which provide a graphical presentation of the data produced. These monitors are distinguishable from other types of monitors and they include monitors which are capable of accepting a signal only from the central processing unit of an automatic data processing machine. Even if the same analogy is applied to projectors, as has been contended by Learned Authorised Representative of the Department, then too it would not be possible to accept the contention of the Learned Authorised Representative of the Department that the Projectors would fall under Heading 8528 69 00. What has to be seen is whether the Projectors are of a kind solely or principally used in an ADP system of heading 8471 and this issue has been elaborately examined in the aforesaid decisions of the Tribunal. Thus, the judgments of the Supreme Court and the decisions of the Tribunal cannot be ignored even if they have not considered the aforesaid (A) contained in Chapter 85 of the Explanatory Notes to the Harmonised System of Nomenclature, which as noticed above, has no bearing on the issue at hand. "

The underlined portions marked above would show that precisely the very same contention of the Revenue that only projectors which are only capable of being connected with an ADP will merit classification under CTH 8528 6200 and be eligible for exemption benefit in terms of SI. No. 17 of Notification No. 24/2005 dated 01.03.2005 was rejected by the Hon'ble CESTAT and this decision was affirmed by the Hon'ble Supreme Court.

1.13.10 It is further submitted that identical issue with respect to speakers came up for consideration before the Hon'ble CESTAT, Bangalore Bench in the case of Logic India Trading Co. vs. Commissioner of Customs, Cochin, reported in 2016 (337) ELT 65 (Tri-Bang.). The issue therein was the classification of multimedia speakers having additional features like presence of USB ports and F.M. Radio. The Hon'ble Tribunal held that the presence of additional features does not change the principal and essential function of the speaker. The said findings was affirmed by the Hon'ble Supreme Court, reported in 2016 (342) ELT A34 (SC).

1.13.11 In view of the above, the applicant submitted that the products in consideration are 'Data Projectors' classifiable under CTH 8528 6200 and are eligible for exemption benefit in terms of SI. No. 17 of Notification No. 24/2005 dated 01.03.2005.

1.14 After following due process of law, this advance ruling authority vide Ruling No. CAAR/Mum/ARC/97/2024 dated 10.07.2024 had given the following ruling on the applicant's question:

"12. In view of the foregoing discussion, I find that the subject goods bearing model nos. (i) PA503S-3 (ii) PA700S, (Hi) PA700X, (iv) PA700W and (v) PS502X are classifiable under CT1 85286200 of the first schedule to the Customs Tariff Act, 1975 however they would not be eligible to avail benefit under Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended".

1.15 Aggrieved by the above said ruling, the applicant filed an appeal [CMA No. 2268 of 2024] under Section 28KA of the Customs Act, 1962 before the Hon'ble Madras High Court. The Hon'ble Madras High Court vide its Order dated 01.04.2025 has set aside the order dated 10.07.2024 and remand the matter to this authority for de nova consideration. The relevant portion of the said order is extracted as follows:

"3. In appellant's application, the same Advance Ruling Authority has held that model of projector will not come under the automatic data processing system and hence, not entitled to exemption.

4. Learned counsel appearing for authority states that in view of the order passed in the case of Ingram Micro India Pvt. Ltd, the Court may quash and set aside the impugned-order and remand the matter for de nova consideration.

5. Shri Deenadayalan states that appellant may produce the order in the case of Ingram Micro India Pvt. Ltd (supra) before respondent No. 1 for consideration.

6. Accordingly, keeping open all rights and contentions, the impugned order dated 10.07.2024 is quashed and set aside. The matter is remanded to respondent no. 1 for de nova consideration. Before passing an order, a personal hearing shall be given, notice whereof will be communicated at least five working days in advance.

7. Petition is disposed of. There shall be no order as to costs. Consequently, the interim application also stands disposed of".

1.16 In view of the Order dated 01.04.2025 passed by the Hon'ble Madras High Court, the issue addressed in the earlier Advance Ruling No. CAAR/Mum/ARC/97/2024 dated 10.07.2024 has been taken up for de novo consideration.

De nova Proceedings

Details of hearing

2.1 Pursuant to the Order passed by the Hon'ble Madras High Court, a personal hearing was conducted on 11.06.2025 through virtual mode. Shri Hari Radhakrishnan, the authorized representative appeared on behalf of the applicant, participated in the hearing. He reiterated the submissions made along with the application and also submitted a compilation of relevant case laws in support of the applicant's position. During the hearing, he placed reliance on the ruling passed in the case of M/s. Ingram Micro India Pvt. Ltd. as well as the Order of the Hon'ble Madras High Court in the applicant's own case. He contended that the presence of additional features does not exclude the product from the scope of its correct classification. Further, he emphasized the language used in the relevant exemption notification, particularly the phrase "all goods of a kind solely or principally," to support the eligibility of the product for exemption. He also submitted that the classification of the goods was not in dispute.

        No one appeared on behalf of the department during the hearing.

Discussion and findings

3.1 I have considered all the materials placed before me for the subject products for de nova consideration as per direction of the Hon'ble High Court of Madras. I have gone through the case presentation, written submissions and submissions made by the applicant during the personal hearing, reliance placed on the case laws. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework.

3.2 The Applicant has sought advance ruling in respect of the following questions:

a. Whether the product i.e. Data Projectors bearing Model Nos. PA503S-3, PA700S, PA700X, PA700W, and PS502X are classifiable under CTI 85286200 of the first schedule to the Customs Tariff Act, 1975 or otherwise?

b. Whether the Data Projectors bearing Model Nos. PA503S-3, PA700S, PA700X, PA700W, and PS502X, are eligible for exemption benefit under Serial No. 17 of Notification No. 24/2005- Customs, dated 01.03.2005, as amended or otherwise.

3.3 At the outset, I find that the issues raised in the questions in the Form CAAR-1 is squarely covered under Section 28H(2) of the Customs Act, 1962 being a matter related to classification of goods and applicability of notification under the provisions of this Act.

3.4 The applicant submitted that the data projectors (Model Nos. PA503S-3, PA700S, PA700X, PA700W, and PS502X) are intended for use in schools, business meetings, and conferences, and are primarily designed for use with Automatic Data Processing Systems (ADPS). These projectors feature HDMI and S-Video ports etc., and are suitable for indoor/outdoor use. Models PA503S-3 and PA700S have a native resolution of 800x600 (SVGA); PA700X and PS502X have 1024x768 (XGA); and PA700W has 1280x800 (WXGA). Unlike home theatre/video projectors, which typically have 4K UHD (3840*2160) resolution, high contrast ratios (1,00,000:1 to 12,00,000:1), and a 16:9 aspect ratio, these projectors have contrast ratios of 12,500:1 to 28,000:1 and an aspect ratio of 4:3, indicating they are not home theatre projectors.

3.5 Before deciding on the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes. As per Rule 1 of GRI, 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.

3.6 Now, I proceed to examine the aspects of classification of the product i.e. data projectors (Model Nos. PA503S-3, PA700S, PA700X, PA700W, and PS502X) under CTI 85286200 {Capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471) of the First Schedule of the Customs Tariff Act, 1975 as proposed by the applicant.

3.6.2 1 note that the Customs Tariff Heading (CTH) 8528 covers "Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus''. The relevant Customs Tariff entries and HSN Explanatory Notes to Heading 8528 is reproduced below for ease of reference:

This heading includes:

(1) Monitors and projectors, not incorporating television reception apparatus.

(2) Television reception apparatus, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus, for the display of signals (television sets).

(3) Apparatus for the reception of television signals, without display capabilities (e.g., receivers of satellite television broadcasts).

Monitors, projectors and television sets utilize different technologies, such as CRT (cathode-tube tube), LCD (liquid crystal display), DMD (digital micro mirror device), OLED (organic light-emitting diodes) and plasma, to display images. Monitors and projectors may be capable of receiving a variety of signals from different sources. However, if they incorporate a television tuner they are considered to be reception apparatus for television.

Monitors, projectors and television sets utilize different technologies, such as CRT (cathode-ray tube), LCD (liquid crystal display), DMD (digital micromirror device),' OLED>(organic light-emitting diodes) and plasma, to display images. ," :..

Monitors and projectors may be capable of receiving a variety of signals from different sources. However, if they incorporate a television tuner they are considered to be reception apparatus for television.

(A) MONITORS CAPABLE OF DIRECTLY CONNECTING TO AND DESIGNED FOR USE WITH AN AUTOMATIC DA TA PROCESSING MACHINE OF HEADING 84.71

This group includes monitors which are capable of accepting a signal from the central processing unit of an automatic data processing machine and provide a graphical presentation of the data processed. These monitors are distinguishable from other types of monitors (see (B) below) and from television receivers.

The monitors of this group may be characterised by the following features:

(i) They usually display signals of graphics adaptors (monochrome or colour) which are integrated in the central processing unit of the automatic data processing machine;

(ii) They do not incorporate a channel selector or video tuner,

(iii) They are fitted with connectors characteristic of data processing systems (e.g., RS-232C interface, DIN, D-SUB, VGA, DVI, HDMI or DP (display port) connectors);

(iv) The viewable image size of these monitors does not generally exceed 76 cm (30 inches);

(v) They have a display pitch size (usually smaller than 0.3 mm) suitable for close proximity viewing:

(vi) They may have an audio circuit and built-in speakers (generally, 2 watts or less in total);

(vii) They usually have control buttons situated in the front panel;

(viii) They usually cannot be operated by a remote control;

(ix) They may incorporate tilt, swivel and height adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic design characteristics to facilitate prolonged periods of viewing at close proximity to the monitor,

(x) They may utilize wireless communication protocol to display data from an automatic data processing machine of heading 84.71.

(B) MONITORS OTHER THAN THOSE CAPABLE OF DIRECTLY CONNECTING TO AND DESIGNED FOR USE WITH AN AUTOMATIC DATA PROCESSING MACHINE OF HEADING
84.71

This group includes monitors which are capable of receiving signals when connected directly to the video camera or recorder by means of composite video, s-video or co-axial cables, so that all the radio-frequency circuits are eliminated. They are typically used by television companies or for closed-circuit television (airports, railway stations, factories, hospitals, etc.). They can, moreover, have separate inputs for red (R), green (G) and blue (B), or be coded in accordance with a particular standard (NTSC, SECAM, PAL, D-MAC, etc.). For reception of coded signals, the monitor must be equipped with a decoding device covering (the separation of) the R, G and B signals. They are not fitted with connectors characteristic of data processing systems, and they do not incorporate tilt, swivel and height adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic design characteristics to facilitate prolonged periods of viewing at close proximity to the monitor. They do not incorporate a channel selector or video tuner.

(C) Projectors

Projectors enable the image normally reproduced on the screen of a television receiver or of a monitor to be projected on an external surface. They may be based on CRT or flat panel technology. "

As per the Explanatory Notes to Heading 8528, a projector is a device that enables the image, which is normally reproduced on the screen of a television receiver or a monitor, to be projected onto an external surface such as a wall or a screen. Projectors work by receiving a video signal from an external source, processing it, and converting it into a format suitable for projection. They may use different technologies for image formation, including CRT (Cathode Ray Tube) or flat panel technology such as DLP (Digital Light Processing), LCD (Liquid Crystal Display), or LCoS (Liquid Crystal on Silicon).

3.6.3 In the present case, as per the technical literate available on the supplier's website, the products, namely the Data Projectors (Model Nos. PA503S-3, PA700S, PA700X, PA700W, and PS502X), are having native resolution of SVGA, XGA and WXGA and these offers large screen in meeting room, classroom, or any other bright environment. Therefore, these product, i.e., Data Projector (Model Nos. PA503S-3, PA700S, PA700X, PA700W, and PS502X), are appropriately classifiable under CTH 8528 (Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus) of the First Schedule of the Customs Tariff Act, 1975.

It is noted that under the category of projectors classified under CTH 8528, there are two specific entries: CTI 85286200 covers "Capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471," while CTI 85286900 covers "Others." CTI 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 technical data sheet of these projectors lists computer graphics compatibility standards, namely, SVGA (Super Video Graphics Array), XGA (Extended Graphics Array) and WXGA (Wide Extended Graphics Array). Further, the HDMI, 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.

3.6.4 It is further observed that the other ports namely HDMI, USB Type A port can also be used to connect such Projectors to a Non-ADP Machines either. The specification for subject goods lists HDTV compatibility standards of the products, whereas the resolution support is SVGA (800 x 600) to WXGA (1280 x 800) which refer to computer display standard. Further, the HDMI, VGA port facilitates connection between the said projectors and laptop/computer.

From the technical specifications provided by applicant, it is clear that the subject goods are principally meant for use in places like conference rooms, business meetings, schools and conferences, financial institutions etc. with connectors matching that of a laptop/computer. Therefore, it is observed that the projector in question is designed for use primarily with an automatic data processing machine. They possess both indoor and outdoor projection capability.

3.6.5 Keeping in view the foregoing, it is apparent that the projectors in question are designed for use with an automatic data processing machine. The applicant has submitted that these projectors are intended for use in conference rooms, business meetings, financial institutions, etc., and come equipped with connectors compatible with PCs, offering both indoor and outdoor projection capabilities. Although these projectors include additional ports—namely, HDMI and USB Type A—that allow them to connect to other devices, the mere presence of such ports does not disqualify the subject goods from classification under CTI 85286200. Accordingly, the subject goods, i.e., Data Projectors, are appropriately classifiable under CTI 85286200 (Projectors—capable of directly connecting to and designed for use with an automatic data processing system of heading 8471) of the First Schedule to the Customs Tariff Act, 1975, in accordance with General Interpretative Rule (GIR) 1 and the Explanatory Notes to Chapter Heading 8528.

3.7 I also proceed to consider whether the product under consideration is eligible for exemption from customs duty under Serial No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended. The relevant extract of the said notification is reproduced below for ease of reference:

From the above, it is evident that SI. No. 17 of the Exemption Notification grants exemption from payment of BCD to goods which are classifiable under sub-heading CTSH 8528 42, 8528 52 and 8528 62. Further, as per column 3 of the Notification, the benefit is granted to all goods falling under the aforementioned sub-headings 'of a kind solely or principally used in an automatic data processing system of heading 8471'.

3.7.2 Therefore, in order to be eligible for the benefit under the exemption notification, any goods must
satisfy the following two conditions:

a. These must be classifiable under CTSH 8528 42 or 8528 52 or 8528 62;

b. These goods must be of a kind which are solely or principally used in an ADP system of CTH 8471;

3.7.3 As discussed above, it is undisputed that the projectors in question are capable of directly connecting to and designed for use with an ADP machine of Heading 8471. Accordingly, I am of the view that these projectors are rightly classifiable under CTI under CT1 85286200 (Projectors—capable of directly connecting to and designed for use with an automatic data processing system of heading 8471) of the First Schedule to the Customs Tariff Act, 1975.

3.7.4 The second condition to be satisfied is that these must be "of a kind which are solely or principally used in ADP system of CTH 8471". It is important to note that the sub-heading covers both "sole use" and "principal use". The term "solely" means "only" or "entirely," implying that the goods are used exclusively for one purpose and no other. In contrast, "principally" means "primarily" or "chiefly," indicating that while the goods are mainly used for one purpose, they may also have secondary or incidental uses.

In this context, it is noted that the projectors in question are principally used for data projection when connected to either a laptop or a desktop computer. Although these projectors are equipped with ports such as HDMI and USB Type A, and could be connected with both ADP and non-ADP systems. However, the mere presence of additional/advanced ports does not disqualify the goods from being considered as principally used with ADP machines, so long as their principal use remains the same.

In various decisions, while discussing the scope of the term "of a kind solely or principally," it has been consistently held that the mere presence of compatibility with other devices or the inclusion of additional features does no* bar the goods from being considered as of a kind solely or principally used with ADP machines. It has been held that so long as the principal use of such projectors is with laptops and desktop computer systems, and as the sub-heading covers both "sole use" and "principal use," the goods would be eligible to benefit from the exemption under the Notification. Reliance is placed in this regard on the following decisions:

a. Commissioner of Customs v. Vardhman Technology Pvt. Ltd. [2014 (301) E.L.T. 427 (Tri. -Mumbai)]- It was held that the projectors merely having additional function cannot be denied classification under CTH 85286100 (erstwhile tariff heading 85286200), which pertains to projectors capable of directly connecting to and designed for use with an automatic data processing system of heading 8471 and are eligible to benefit of exemption under Notification No. 24/2005

b. Epson India Pvt. Ltd. v. Commissioner of Customs, Chennai [2019 (366) E.L.T. 847 (Tri. - Chennai)]- The Hon'ble Tribunal, Chennai held that Business/Data projectors principally meant for use with an Automatic Data Processing (ADP) system, having indoor/outdoor projection capability with features of low contrast ratio and resolution to match PC screen with high or very high brightness and designed to project in places like conference rooms, business meetings, financial institutions etc. with connectors matching that of PC, are classifiable under Tariff Item 8528 61 00 (erstwhile 85286200) of Customs Tariff Act, 1975 and not under Tariff Item 8528 69 00 of the said Tariff as Video Projectors. Such goods when imported are eligible to benefit of exemption under Notification No. 24/2005. This decision was upheld by the Hon'ble Supreme Court in Commissioner v. Epson India Pvt. Ltd. [2019 (366) E.L.T. A173 (S.C.)], thereby attaining finality.

c. Acer India Pvt. Ltd., Vs. Commissioner of Customs(lmport), Chennai [Final Order No. 40011 of 2024 in Appeal No. C/40333 of 2015, decided on 3-1-2024]- The Tribunal held that while "common parlance" or "commercial usage" test was generally preferable for classifying consumer goods, but when goods have to be tested for their sole or principal use, their technological capabilities could not be completely discarded - Specifications and technological features of data projector had persuasive role in determining intended use solely and principally with ADP machines - Keeping with judicial discipline, reasoning in Coordinate Bench decision was followed - Hence, video projectors were classifiable under Tariff Item 8528 61 00 (erstwhile CTI 85286200) and entitled to exemption under Cus., dated 1-3-2005.

d. BenQ India Pvt Ltd. v. ADG(Adjudication), New Delhi [2022 (9) TMI690 CESTA T NEW DELHI] (Customs Appeal No. 52428 of 20I9-DB)- The Hon'ble Tribunal held that mere presence of multiple ports does not undermine the basic nature of the goods, namely being capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.

3.7.5 Further, reliance is placed on the Order dated 28.08.2024 passed by the Hon'ble Madras High Court in the case of M/s. Viewsonic Technologies India Private Limited vs. The Customs Authority for Advance Rulings & Others \CM.A. No. 1827 of 2024], wherein it was held that the expression "principally used" would mean "primarily used." The Court observed that merely because a monitor can also be used with other devices does not render it ineligible for the benefit of the exemption under the Notification. It was further noted that technology has evolved and new-generation monitors are manufactured with multiple options for the user; the addition of new features would not, by itself, make them ineligible for exemption. Therefore, the mere presence of HDMI, VGA, and DVI ports in the monitors would not disentitle them from availing the benefit under Serial No. 17 of Notification No. 24/2005-Customs dated 01.03.2005, as amended.

3.7.6. In view of the above discussion, considering the wording of the exemption notification and the case law cited supra, I am of the considered view that the projectors in question are principally used with ADP machines and are eligible to claim the benefit of exemption from duty under Serial No. 17 of Notification No. 24/2005-Customs, as amended.

4. In view of the foregoing discussions and findings, I reach to conclusion that the products under question namely data projectors bearing model nos. (i) PA503S-3 (ii) PA700S, (iii) PA700X, (iv) PA700W and (v) PS502X are classifiable under CTH 8528 (Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus), more specifically under CTI 85286200 (Projectors-capable of directly connecting to and designed for use with an automatic data processing system of heading 8471) of the first schedule to the Customs Tariff Act, 1975 and same are eligible to avail the duty exemption benefit under Sr. No. 17 of Notification No. 24/2005-Customs, dated 01.03.2005, as amended.

5. I rule accordingly.

(Prabhat K Rameshwaram)    
Customs Authority for Advance Rulings, Mumbai

F. No. CAAR/CUS/APPL/105/2023-O/o Commr-CAAR-Mumbai                                                    Dated: 16-06-2025

This copy is certified to be a true copy of the ruling and is sent to: -

1. M/s Viewsonic Technologies India Private Limited,
B-8, Khader Nawaz Khan Road, Nungambakkam,
Chennai, Tamil Nadu -600006
Email: anandraj@phpandco.com; hari@agol.in. gokul@agol.in

2. The Commissioner of Customs,
Chennai-11 (Import), Custom House, 60,
Rajaji Salai, Chennai- 600 001.
Email: commr2-cuschn@gov.in, chennai-importoffice@gov.in

3. The Customs Authority for Advance Rulings,
Room No. 24, New Customs House,
Near IGI Airport, New Delhi-110037.
Email: cus-advrulings.del@gov.in

4. The Principal Chief Commissioner of Customs,
Mumbai Customs Zone-I, Ballard Estate, Mumbai -400001.
Email: ccu-cusmum1@nic.in

5. The Commissioner (Legal), CBIC Offices,
Legal/CX.8A, Cell, 5th floor, Hudco Vishala Building,
C-Wing, Bhikaji Cama Place, R. K. Puram, New Delhi - 110066.
Email: anishgupta.irs@gov.in, commr.legal-cbec@nic.in

6. The Member (Customs),
CBIC, North Block, New Delhi-110001.
Email: membercus.cbic@.gov.in

7. The STO(TU),
Tariff Unit, Customs Policy Wing,
Central Board of Indirect Taxes and Customs,
North Block, New Delhi-110001.
(Email: tariffunit-rev@nic.in. is-tru01@gov.in )

8. The Webmaster, Central Boards of Indirect Taxes & Customs.
Email: webmaster.cbec@icegate.gov.in

9. Guard file.
 

(Vivek Dwivedi)              
Dy. Commissioner & Secretary
Customs Authority for Advance Rulings,
Mumbai