ORDER
C. Satapathy, Member (T)
1. The lower authorities have classified the impugned goods manufactured by the appellants as video monitors under Heading 85.28, whereas the appellants claim classification under Heading 84.73 as computer monitors being parts of computers of Heading 8471. It is seen from the Order-in-Original that the Deputy Commissioner has observed as follows :-
“I therefore turn my attention to the HSN and find that in Heading 84.73 there is no mention of Computer Colour Monitor as parts and accessories of Heading No. 84.71. However, in case of Heading No. 85.28 item “Video Monitor” is specifically there. I therefore have no hesitation to classify the impugned goods as Video Monitor.”
2. The Commissioner (Appeals) who has upheld the order of the Deputy Commissioner has observed in his order as follows :-
“The product literature shows that this monitor can be used for various purpose. Further as per their Production Manager, this monitor can be used with small modification as Television Receiver. Therefore, the Adjudicating Authority is correct to classify the impugned product as video monitor which can be used as television receiver under SH No. 8528.90. The video monitor manufactured by the appellant may be used with Computer Monitor among its other uses but that does not mean that it is essentially output unit of Automatic data processing machine i.e. Computer.”
3. We have heard Shri B.J. Mukherjee, learned Advocate, for the appellants and Shri A.K. Mondal, learned SDR, for the Revenue. The appellants have referred to the Explanatory Notes to the HSN under Heading No. 84.71 which reads as follows :-
“(D) SEPARATELY PRESENTED UNITS
This heading also covers separately presented constituent units of data processing systems ……………………………………………………… Among the constituent units included are display units of automatic data processing machines which provide a graphical presentation of the data processed. They differ from the video monitors and television receivers of Heading 85.28 in several ways, including the following :
(1) 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, 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.
(2) 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. (3) In order to accommodate the presentation of small yet well-defined image, 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). (4) In these display units, the video frequency (bandwidth), which is the measurement determining how many dots can be transmitted per second to form the image, is generally 15 MHz or greater. Whereas, in the case of video monitors of Heading 85.28, the bandwidth is generally no greater than 6 MHz. The horizontal scanning frequency of these display units varies according to the standards for various display modes, generally from 15 MHz to over 155 KHz. Many are capable of multiple horizontal scanning frequencies. The horizontal scanning frequency of the video monitors of Heading 85.28 is fixed, usually 15.6 or 15.7 KHz depending on the applicable television standard. Moreover, the display units of automatic data processing machines do not operate in conformity with national or international broadcast frequency standards for public broadcasting or with frequency standards for closed-circuit television. (5) Display units covered by this heading frequently incorporate tilt and swivel adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic design characteristics to facilitate prolonged periods of viewing at close proximity to the unit." The Explanatory Note under Heading No. 8521 further clarifies as follows :-
“Video monitors which are receivers connected directly to the video camera or recorder by means of co-axial cables, so that all the radio-frequency circuits are eliminated. They are used by television companies or for closed-circuit television (airports, railway stations, steel plants, hospitals, etc.). These apparatus consist essentially of devices which can generate a point of light and display it on a screen synchronously with the source signals. They incorporate one or more video amplifiers with which the intensity of the point can be varied. 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. The most common means of image reconstitution is the cathode-ray tube, for direct vision or a projector with up to three projection cathode-ray tubes; however, other monitors achieve the same objective by different means (e.g., liquid crystal screens, diffraction of light rays on to a film of oil).
Video monitors of this heading should not be confused with the display units of automatic data processing machines described in the Explanatory Note to Heading 84.71.”
4. The appellants have drawn our attention to the distinction between computer monitor and video monitor and have further stated as follows :-
(i) Computer monitors manufactured by the appellants are capable of accepting signals only from a Central Processing Unit (CPU). (ii) Unlike video monitors, the computer monitors manufactured by the appellants are capable of accepting signals only from CPU. It has been clarified in the HSN that the display units of automatic data processing machines are capable of accepting signals only from the CPU of an automatic data processing machine and are therefore not able to reproduce a colour image from a composite video signal whose wave from conforms to a broadcast standard (NTSC, SECAM, PAL, D-MAC, etc.). (iii) Unlike video monitors, electromagnetic field emissions in computer monitors are low and display pitch size at 0.41 mm for medium resolution and gets smaller as resolution increases. (iv) The computer monitor manufactured by the appellants have a pitch size of 0.28 MM. As explained in Explanatory notes to the HSN, the display units in computer monitors are generally characterized by low electromagnetic field emissions. The display pitch size starts at 0.41 mm for medium resolution and gets smaller as the resolution increases. However, this is not the case with the video monitors. (v) Unlike video monitors, computer monitors have greater convergence standards.
(vi) In order to accommodate the presentation .of small yet well defined images, computer monitors utilize smaller clot (pixel) sizes and grater convergence standards than those applicable to video monitors and television receivers of Heading 85.28. The computer monitors manufactured by the appellants conforms to the said standards and hence in any case cannot be regarded as video monitors.
(vii) Unlike video monitors where video frequency (bandwidth) is not greater than 6 MHz, in computer monitors, the video band width is generally 15 MHz or greater, which in the case of the appellants is 50 MHz. (viii) The monitors manufactured by the appellants have video band width, which is the measurement determining how many dots can be transmitted per second to form, the image, is 50 MHz. However, in the case of video monitors the bandwidth is generally not greater than 6 MHz.
(ix) Further as explained in the HSN, the horizontal scanning frequency of computer monitors aries according to the standards for various display modes, generally from 15 KHz to over 155 KHz. Many are capable of multiple horizontal frequencies. The horizontal scanning frequency of the video monitors of Heading 85.28 is fixed, usually 156 or 15.7 KHz depending on the applicable television standard. In the case of the appellants, the horizontal scanning frequency is generally 30-48 KHz. and in no case be regarded as a video monitor classified under chapter 85.28. Moreover, the display units of automatic data processing machines do not operate in conformity with national or international broadcast frequency standards for public broadcasting or with frequency standards for closed circuit television.
(x) From the aforesaid explanations, it may be seen that the computer monitors manufactured by the appellants are entirely different from the video monitors classifiable under chapter 85.28 of CETA.
5. The appellants have also cited the following case laws to support their submissions that Explanatory Notes to HSN have not only persuasive value but are entitled to greater consideration in classifying goods under Central Excise and Customs Tariff :-
(1) C.C., Bombay v. Business Forms Ltd. – 2002 (142) E.L.T. 18 (S.C.)
(2) CCE, Hyderabad v. Bakelite Hylam Ltd. – 1997 (91) E.L.T. 13 (S.C.)
6. After hearing rival submissions and perusal of case records, we are of the opinion that there is a clear distinction between computer monitor and video monitor as has been clarified in the Explanatory Note to the HSN. The impugned product manufactured by the appellants is designed to be used as computer monitor and is rightly classifiable under Heading 8471 as an output unit of computer. The fact that computer monitor is not specifically mentioned under Heading No. 8473 as observed by the Deputy Commissioner is not material in the light of the Explanatory Note to the HSN requiring classification of such monitors under Heading 8471. The observation of the Commissioner (Appeals) based on the statement of the Production Manager that such monitors can be used with modification as television receivers cannot also alter the classification of the said monitors which are to be classified as cleared from the factory without taking into consideration the possibility of modification of such units and possible other uses of such modified products. The claim of the appellants for classification of the impugned goods under sub-heading 8473.20 as part of a computer cannot also be accepted. The Explanatory Notes to the HSN and the case laws relied upon by them clearly require classification of the impugned goods under Heading 8471 as an output unit of automatic data processing machines.
7. Accordingly, we set aside the impugned order passed by the lower authorities classifying the impugned goods under Heading 85.28 and direct that the impugned goods be classified under Heading 8471. The appeal is allowed as indicated above.