1997 (7) TMI 256 - AT - Central Excise

Summary

Issues: Classification of colour video monitors under the old Central Excise Tariff.

Analysis:
1. The appeal filed by the Revenue concerns the classification of colour video monitors under the old Central Excise Tariff. M/s. Gadodia Electronics Ltd. initially paid Central Excise Duty under Item No. 37BB but later sought a refund, claiming the correct classification under Item No. 68 of the Tariff.

2. The Collector of Central Excise (Appeals), New Delhi, agreed with M/s. Gadodia Electronics Pvt. Ltd. that the colour video monitors should be classified under Item No. 68 of the Tariff, as they were deemed to be only display devices without the capability to record sound or image.

3. The Revenue argued that video monitors should be classified under Heading No. 85.28 of the Harmonised Commodity Description and Coding System (HSN) based on Tariff Advice No. 37/84. However, the respondents contended that the Tariff Advice was not applicable to the goods in question, citing the scope of Item No. 37BB and the separate classification of video reproducing apparatus under Heading No. 85.21 of the HSN.

4. The respondents, engaged in manufacturing colour video monitors, sought classification under Item No. 68 of the Tariff, covering 'all other goods not elsewhere specified.' The Assistant Collector of Central Excise classified them under Item No. 37BB, emphasizing the capability of the video monitors to receive and reproduce video signals comprising image and sound signals.

5. Item No. 37BB of the Central Excise Tariff encompassed television image and sound recorders and reproducers, including video cassette recorders and decks. The Tariff Advice clarified the coverage of various instruments under this item, distinguishing them from broadcast television receiver sets.

6. Video monitors, according to the Explanatory Notes to the HSN, are receivers directly connected to video cameras or recorders, primarily used by television companies or for closed-circuit television. They are distinct from display units of data processing machines, designed to generate and display images synchronously with source signals, utilizing various technologies such as cathode-ray tubes or liquid crystal screens.

7. The expression "reproducers" in Item No. 37BB refers to apparatus that convert recorded signals into video signals for direct reproduction on a receiver. The classification of video monitors under Heading No. 85.28 of the HSN distinguishes them from reproducing apparatus under Heading No. 85.21, as monitors serve as display devices without the capacity to record or reproduce images or sound independently.

8. The judgment concurred with the Collector of Central Excise (Appeals) that video monitors, lacking the ability to record or reproduce sound or image, were solely display devices. The reliance on Tariff Advice No. 37/84 regarding closed circuit television sets was deemed inapplicable to the classification of individual video monitors.

9. Considering all pertinent factors, the Tribunal rejected the Revenue's appeal, affirming that video monitors were not capable of recording or reproducing sound or image, solely serving as display devices.