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AUTHORITY FOR ADVANCE
RULINGS
(CUSTOMS, CENTRAL EXCISE & SERVICE TAX)
NEW DELHI
PRESENT
Hon'ble Mr. Justice Syed
Shah
Mohammed Quadri (Chairman) |
Mr. Somnath Pal
(Member)
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Dr. B.A. Agrawal
(Member) |
Ruling No. AAR (CUS)/04/2004
Application No.AAR/106/CUS/2004
Applicant
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M/s.Bloomberg
Data Services ( India )
Pvt. Ltd.,
51 A, Maker Chambers IV,
Nariman Point
Mumbai-400 021
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Commissioner designated
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Shri R.K. Singh
Additional Director General
Directorate of Revenue Intelligence
New Delhi.
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Present : for the applicant
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Shri D. Arvind,
Consultant
Shri Udayan D.Choksi,
Consultant
Shri Mohit Dubey,
Technical Expert for the Commissioner designated
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Shri R.K.
Singh,
Additional Director General
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R U L I N G
( By Mr Somnath Pal, Member )
M/s
Bloomberg Data Services (India) Pvt. Ltd. (the name of the applicant as amended
and to be referred to hereinafter as the 'applicant') have filed an application
under section 28 H (2) (a) of the Customs Act, 1962. The issue, though not
framed as a question, on which advance ruling has been sought by the applicant
is in respect of classification of Bloomberg 17-inch Flat Panel under Customs
Tariff Act, 1975.
2. As per the statements filed by the applicant in respect of the point
on which the advance ruling is required, they are engaged in the business of
providing on-line financial information. To subscribe to these services the
applicant provides computer hardware facilities. In this regard they are
proposing to import 17" Flat Panel used for personal computers. According to
the applicant the product in question is Flat Monitor to be used as an output
unit of a computer. As per the specifications/features, this product is not
capable of reproducing a colour image from a composite video signal whose
waveform conforms to a broadcast standard ( NTSC, SECAM, PAL, D-MAC etc ). In
their application, they have also enclosed the definition of "composite video
signal" as per which such a signal specifies everything a television needs to
display monochrome (called RS-170) or colour ( called NTSC ) pictures. It is
called "composite" because the signal which can be carried by a single co-axial
cable is composite of three different signals, namely, "luminance information",
"blanking information" and "synchronizing information". It has been further
submitted by them that the question of alternate classification does not arise
and the product in question clearly falls under Chapter heading 8471.60 which
reads as "input or output units, whether or not containing storage units in the
same housing." The particular monitor proposed to be imported by them is
covered by the sub-heading 8471 60 30 of the First Schedule of the Customs
Tariff Act, 1975 (hereinafter referred to as "the Schedule") as amended.
3. In further support of their view the applicant has drawn our
attention to the "Bloomberg Flat Panel Technical Information" leaflet as well as
to a letter dated 25/9/2004 signed by one Mr Paul Vitoria, Quality Assurance,
Bloomberg LP, 499, Park
Avenue,
New York certifying that the "Bloomberg 17" Flat Panel, Model No. FP 1500-17,
manufactured by Bloomberg LP is strictly intended for use as a PC display
monitor, operating in VGA, SVGA, XGA & SXGA modes. The Bloomberg 17" Flat Panel
does not have the capability of accepting composite video inputs, which would
allow them to be used as video or TV monitors. There are No electronics within
the Panel nor connections on the outside which would allow the Panel to display
Video of any sort".
4. The applicant has also referred to the HSN Explanatory Note in the
context of tarrif heading 84.71 which inter alia deals with "Automatic
data processing machines and units thereof". Particular attention has been
drawn to the well-defined difference between the display units of automatic data
processing machines which provide a graphical presentation of the data processed
and the video monitors and television receivers of heading 85.28. As per this
Explanatory Note the difference is on several counts including five aspects
which have been specified in particular in the said Note. It has been pleaded
by the applicant that the product in question cannot be used as a video monitor
and television receiver of the heading 85.28 and therefore, it would be
classifiable under the heading 84.71. The applicant has also furnished copies
of the letter dated 12/9/2003 addressed to the HM Customs and Excise, Education
and Support Team - Tariff Classification Service, Customs and International
Trade Operations, Essex, UK applying for a Binding Tariff Information ruling for
Bloomberg 17" Flat Panel and the response thereto dated 26/9/2003 in respect of
the goods described as "17 inch Flat Panel computer monitor. To be connected
only to a compatible PC. Is operated in VGA, SVGA, XGA and SXGA display modes at
60 Hz ( Maximum refresh rate of 75 Hz) 16.2 million colours. Cannot receive a
composite video signal .........", expressing the view that it would merit classification under 8471 60 9000 in
the customs nomenclature.
5. The Departmental representative is also of the view that the product
in question is to be used as an output unit in a computer and is not capable of
reproducing a colour image from composite video signal whose waveform conforms
to the broadcast standard like NTSC, SECAM, PAL, D-MAC etc. Further, the
product operates in VGA, SVGA, XGA, and SXGA at 60 Hertz display mode and it is
connected to the PC video card through 15 pin VGA connector. As per the design
of the connectors given in the technical literature submitted by the applicant,
the product does not have a connector for video cable. Therefore, the product
would be appropriately classifiable under Customs Tariff heading 8471.60 as
output unit of an automatic data processing machine and more specifically under
the sub-sub-heading 8471 60 30 as "Monitor".
6. The item which the applicant proposes to import, we observe, is
described by them as Bloomberg 17-inch Flat Panel. As per the "Installation and
Reference Guide" for the Bloomberg Flat Panel, submitted by the applicant, this
product "is comprised of two high-quality independent and versatile,
ergonomically screen panel devices attached to a space frame and column".
According to the Chambers Dictionary of Science & Technology, a "monitor" in the
context of Image Technology, means " a video display screen for critical picture
presentation, not usually provided with radio frequency reception circuits to
act as a TV receiver". There is, therefore, no doubt that the product in
question is a "monitor".
7. In order to appreciate the classification issue in the limited
context of the identity of the product in question, it is necessary to refer to
the heading 8471 of the Schedule (2004-2005) which reads as follows :-
"Automatic data
processing machines and units thereof; magnetic or optical readers, machines for
transcribing data on to data media in coded form and machines for processing
such data, not elsewhere specified or included". Sub-heading 8471 60 reads - "Input or output units, whether or not
containing storage units in the same housing".
The sub-sub-heading 8471 60 30
covers "Monitor".The possible competing entry in the Customs Tariff Act is the
heading 8528 which reads as :-
"Reception apparatus for television, whether or not incorporating
radio-broadcast receivers or sound or video recording or reproducing apparatus;
video monitors and video projectors".
The short question which therefore, arises for a decision is - would
the product in question fall under 8471 60 30 or under 8528?
8. Focussing our attention first to the ambit of heading 8471 we observe
from the HSN Explanatory Notes given under section XVI, heading 84.71 that
amongst the constituent units of an automatic data processing machine, are
included display units which provide a graphical presentation of the data
processed. The HSN Note has given a few important aspects in which the display
units of automatic data processing machines differ from the video monitor and TV
receivers of heading 85.28. The first three important areas of difference
between the two have been indicated as follows.
" (i) Display units of automatic data processing
machines are capable of accepting a signal only from the central processing unit
of an automatic data processing machine and are therefore not able to reproduce
a colour image from a composite video signal whose waveform conforms to a
broadcast standard (NTSC, SECAM, 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.
(ii)
These
display units are characterized by low electromagnetic field emissions. Their
display pitch size starts at 0.41 mm for medium resolution and gets smaller as
the resolution increases.
(iii)
In order
to accommodate the presentation of small yet well-defined images, display units
of this heading utilize smaller dot (pixel) sizes and greater convergence
standards than those applicable to video monitors and television receivers of
heading 85.28. (Convergence is the ability of the electron gun(s) to excite a
single spot on the face of the cathode-ray tube without disturbing any of the
adjoining spots)".
It may
not be out of place at this stage to see what a 'video monitor' means since
that, as we have stated already , is the only possible competing entry in the
Customs Tariff Act vis-à-vis the entry "monitor" as an output unit of an
automatic data processing machine. As per the Scala-Glossary of Terms, "video
monitor" is defined as "a device that can display video images (see video). A
television is a video monitor with a built-in TV tuner. To be viewed on a video
monitor, an infoChannel production must be run on a computer whose graphics
output runs through a VGA-to-video converter." The significant point to note
from the above definition, in our limited context, is that a computer "monitor"
whose graphics output runs through a VGA (short form of Video Graphics Array)
would need a 'video converter' if it has to function as a 'video monitor'.
9. From the technical literature of the product proposed to be imported
by the applicant, it is noticed that it operates in VGA, SVGA, XGA & SXGA
display modes at 60 Hz. It provides 16.2 million colours and automatically
adjusts itself to all supported video resolutions. It has been strongly
recommended in the Bloomberg technical brochure that to obtain the best
fidelity, the computer be set to 60 Hz, 32 - bit colour and 1280 x 1024 (SXGA)
screen resolution. The Bloomberg Flat Panel connects directly to a Bloomberg -
ready PC. As per the "Connections and Installation Instructions", there are
three connectors for the Flat Panel in question namely -
(i)
VGA
connector A ---- 15 pin VGA connector
(ii)
VGA
connector B ---- 15 pin VGA connector
(iii)
Power
Supply connector ---- 5 pin DIN connector.
It has
been further clarified that the VGA connectors A and B are used to connect the
two 17" monitors to the PC video card. The connectors have letter "A" or letter
"B" moulded into the plastic and the connector head to distinguish one from the
other. In order to install the 17" Flat Panel, it is important that the PC
video card must support dual monitors or the PC must have multiple video cards.
The technical literature furnished by the applicant further gives us
the information that the technology used in the Display Unit (product under
consideration) is "a - Si TFT active matrix" (which stands for "Amorphous -
Silicon Thin-Film-Transistors active matrix"). This appears to be one of the
more recent technologies which has been put to use as a result of the progress
in active matrix liquid crystal displays. There is, however, nothing before us
to suggest that this technology, per se, used in the product proposed to be
imported by the applicant, would permit it to receive the composite video
signals or convert input through VGA into an input for a video monitor. In
fact, the communication dated 25th September 2004
from Mr Paul Vitoria, Quality Assurance, Bloomberg LP,
New York
has categorically ruled out such possibility.
10. As we have already noted, the Bloomberg 17-inch Flat Panel
operates in VGA (Video Graphics Array), SVGA (Super VGA), XGA (Extended Graphics
Array) and SXGA (Super XGA) at 60 Hz display mode and it is connected to the PC
Video Card through 15-pin VGA connector. As we understand, VGA is a graphics
display system for PCs (Personal Computers) developed by IBM. In text mode, VGA
systems provide a resolution of 720 by 400 pixels. In graphics mode, the
resolution is either 640 by 480 (with 16 colors) or 320 by 200 (with 256
colors). The Super XGA (SXGA) - the system which has been strongly recommended
for the product in question for obtaining the best fidelity, is capable of
displaying 1280 x 1024 resolution ('Resolution' refers to the sharpness, or
details of the visual image). A computer monitor has a much higher resolution
than what is required in a video monitor like TV. This criterion appears to be
satisfied in the case of the product under consideration. Moreover, a 15-pin
VGA connector (which is apparently used in the product) has three separate lines
for the red, green and blue colour signals (RGB) and two lines for horizontal
and vertical synchronizing signals while in a normal television, all of these
signals are combined into a single composite video signal. The separation of
the signal is one reason why a computer monitor can have so many more pixels
than a TV set (Ref : "How Computer Monitors work" by Jeff Tyson") (A pixel
represents the smallest piece of the screen that can be controlled individually
and a complete screen image is composed of thousands of pixels). The NTSC
(short for National Television System Committee), the PAL ( short for Phase
Alternation by Line ) and the SECAM ( short for Systeme Electronique Couleur
Avec Memoire) are all television and video standards which define a composite
video signal whereas computer video standards generally use RGB ( Red, Green and
Blue ) video signals.
11. Having regard to the technical information and parameters
furnished by the applicant in respect of the product proposed to be imported by
them and in the light of what has been stated in the foregoing paragraphs, we
are of the view that Bloomberg 17-inch Flat Panel - the product in question - is
a display unit of an automatic data processing machine and cannot be used, per
se, as a video monitor and television receiver of the heading 8528 of the
Schedule. It may not be out of place to mention here that as per the HSN
Explanatory Note (a) below the Heading 85.28 which inter alia covers
Video Monitors, this Heading excludes "Display Units of automatic data
processing machines, whether or not presented separately (heading 84.71) ". The
classification of the product under consideration which is found to be a display
unit of an automatic data processing machine would therefore be only under
Heading 84.71. The Departmental representative has also projected the same view
before us.
12. In view of the foregoing discussion, we rule on the
abovementioned question that the product namely Bloomberg 17-inch Flat Panel as
described in the application and its annexures is a Monitor ( an output unit )
of automatic data processing machine and would therefore, be classifiable
under Tariff Item 8471 60 30 of the Schedule ( 2004-2005).
Sd/-
(B.A.AGRAWAL)
MEMBER |
Sd/-
(JUSTICE S.S.M.QUADRI)
CHAIRMAN |
Sd/-
(SOMNATH PAL)
MEMBER |
Dated 28th
October, 2004.
No.AAR/44/106/04
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