The Hindu Business Line : No neat fit for definitions

AN unusual applicant at the Authority for Advance Ruling (AAR), New Delhi, was Bloomberg Data Services (India) P Ltd. The question for discussion was about how its `17-inch flat panel' should be classified for Customs' purpose.

The company is popular in "the business of providing online financial information," and it provides its subscribers with `computer hardware facilities' to access the info services. In this connection, Bloomberg wanted to import the panel; it explained that the product is `flat monitor' for use as `an output unit of a computer'. And that the panel 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 and so on)."

If you want to know what a composite video signal is, the order of Somnath Pal, Member of the AAR, as reproduced in a recent issue of Excise Law Times elaborates: "Such a signal specifies everything a television needs to display monochrome or colour pictures." It's called `composite' because the signal carried by a single coaxial cable is a composite of three different information signals, on luminance, blanking, and synchronising. "Separation of the signals is one reason why a computer monitor can have so many more pixels than a TV set," the AAR stated, citing Jeff Tyson's How Computer Monitors Work.

Lest you blank out before knowing what the fight was about, you should know that there was no dispute. Bloomberg sought that the panel be classified as "input or output units, whether or not containing storage units in the same housing." And the Department was also of the same view; that the product fell under "output unit of an automatic data processing machine and more specifically under the sub-sub-heading 8471.60.30 as `monitor'."

There's no bone of contention, you may notice, but the AAR is a facility that came into force about five years ago in the field of Customs. It enables assessees to plan their taxes by seeking binding ruling on specific issues that may arise in the determination of tax liability. Bloomberg had applied under Section 28H of the Customs Act which talks about `application for advance ruling'. A recent amendment to this Section was in Budget 2003, that of allowing wholly-owned subsidiary Indian company of a foreign company to avail the benefit of advance ruling.

To assist the Authority to decide, Bloomberg provided a technical information leaflet and also a letter of September 2004 from its New York office's quality assurance staff certifying that the panel "manufactured by Bloomberg LP is strictly intended for use as a PC display monitor, operating in VGA, SVGA, XGA and SXGA modes." It was also stated that there were no electronics within the panel nor connections on the outside to allow the panel to display video of any sort. The company also produced a letter it had written to the UK taxman for the same panel imported there, seeking `binding tariff information ruling'; in that, it was ruled as `17 inch flat panel computer monitor'.

Consultants D. Arvind and Udayan D.Choksi, plus a technical expert Mohit Dubey of the Directorate of Revenue Intelligence (DRI) represented Bloomberg, while R.K. Singh, Additional Director-General of DRI appeared for the Department. Thus, it is obvious, the need for clearing the air was needed on both sides, because Customs Tariff had separate heading for video monitors and TV receivers, and it was therefore necessary to be sure that Bloomberg's panel did not fall under the same. The `competing entry' in 8528 read: "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 Authority also looked at the installation guide for the panel and noticed that the product "is comprised of (sic) two high-quality independent and versatile, ergonomically screen panel devices attached to a space frame and column". There is also a reference to the Chambers Dictionary of Science and Technology: "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." Scala-Glossary of Terms performed some support to infer that "a computer monitor whose graphics output runs through a VGA would need a video converter if it has to function as a video monitor.

Furthermore, aid came from an Explanatory Note of Harmonised System of Nomenclature (HSN) that listed a few important aspects of difference between `display units of automatic data processing machines' and video monitors. One, the display units accept signals only from the CPU. Two, their electromagnetic field emissions are low - "display pitch size starts at 0.41 mm for medium resolution and gets smaller as the resolution increases." And, three, there are `greater convergence standards' in display units "to accommodate the presentation of small yet well-defined images." `Convergence' has an exciting meaning here: It is "the ability of the electron guns to excite a single spot on the face of the cathode-ray tube without disturbing any of the adjoining spots."

On the technology used by Bloomberg, there is some input you can cull out from the ruling: `a-Si TFT active matrix' - that is, of amorphous silicon thin-film-transistors. "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," observed the Authority.

Ultimately, the AAR ruled: "There is, therefore, no doubt that the product in question is a monitor." A resolution, one may say, of technology in the active matrix of law.

Cases@TheHindu.co.in

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