Basic Customs Duty Exemption On Import Of Colour Data Projectors: CESTAT

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the import of colour data projectors is exempted from basic customs duty.

The two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that for the period prior to 01.01.2017, all goods falling under CTSH 8528 41, 8528 51, or 8528 61 were unconditionally exempted from payment of Basic Customs Duty under Serial No. 17 of the exemption notification. Post 01.01.2017, Serial No. 17 of the notification exempts all goods falling under CTSH 8528 42, 8528 52, or 8528 62 if they are of a kind solely or principally used in an automatic data processing machine of heading 8471. The goods imported by the appellant satisfy the description of the goods in the exemption notification for both periods and are, therefore, eligible for exemption.

The appellant/assessee is engaged in the import and sale of projectors in India and has been importing digital projectors from China and Taiwan by categorising them as "data projectors" and "video projectors" on the basis of their specifications, characteristics and usage. According to the appellant, the data projectors are primarily meant for use with an automated data processing system and are designed for the projection of data in places like conference rooms, auditoriums, and classrooms. Video Projectors are used for entertainment purposes for use in home theatres, for playing games and in home cinemas.

The period of dispute is from 07.11.2013 to 09.10.2018 and the issue involved in the appeals is whether "data projectors" imported by the appellant are classifiable under Customs Tariff Item 8528 61 00/8628 62 00 or under CTI 8528 69 00. Consequently, whether exemption from payment of Basic Customs Duty under Serial No. 17 of the exemption notification dated 01.03.2005 has been correctly availed by the appellant.

The appellant contended that the addition of multiple ports in the goods does not take away the basic nature of the goods, which is to work in conjunction with ADPS. It is still the primary function of the contested goods. The presence of ports is only to ensure their use with laptops and ADPS. Consequently, the presence of ports makes them capable of being connected to ADPS. Therefore, even post 31.12.2016, the goods imported by the appellant are correctly classifiable under CTI 852862 00 and the legal portion classified by the Courts will continue to apply to the projectors imported w.e.f 01.01.2017.

The department contended that the appellant had conspired and colluded to mis-declare multimedia projectors to classify the same under CTI 8528 61 00/8528 62 00 wrongly with the sole intention of availing customs duty. To support the collusion and mis-declaration, the department referred to an e-mail sent by Shri Sunil Verma (an employee of the appellant) to Shri R. Ravichandran, Managing Director of Blissing Cargo Care Private Limited (the Customs Broker) wherein the appellant had shown their intent to clear the multimedia projector under CTI 85286 61 00/8528 62 00.

The tribunal stated that the inclusion of multiple ports in the goods does not change the basic nature of the goods, which is to work in tandem with ADPS.It would continue to remain the principal function of the good. The presence of such ports is only to ensure their use with laptops and ADPS. Therefore, even post 01.07.2017, goods would be classifiable under CTI 8528 62 00 and the decisions of the Tribunal rendered for the period prior to 01.07.2017 will continue to apply to projectors imported w.e.f. 01.01.2007.

"The Department has filed appeals as penalties under section 114AA of the Customs Act have not been imposed. As the appellant has correctly availed the benefit of the exemption notification, the appeals filed by the department deserve to be dismissed," the CESTAT said.

Case Title: M/s BenQ India Pvt. Ltd. Versus Additional Director General (Adjudication)

Citation: Customs Appeal No. 52428 of 2019-DB

Date: 12.09.2022

Counsel For Appellant: Advocates V. Lakshmikumaran, Anurag Kapoor & Sonam Yadav

Counsel For Respondent: Special Counsel Mihir Ranjan

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