During subsequent examination by the Custom Authorities, the Concerned Goods were classified under ‘Tariff Item 8471 30 10’, which was later confirmed by the Assistant Commissioner of Customs and Commissioner of Customs (Appeal).
In contrast, a classification under ‘Tariff Item 8471 50 00’ invites valuation based on price mechanism under Section 4 of Central Excise Act, 1944 which would have effectively reduced the overall liability to pay the requisite duty. 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 8471 30 – Portable digital automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display 8471 30 10 – Personal computer 8471 30 90 – Other – Other automatic data processing machines 8471 41 – Comprising in the same housing at least a central processing unit and an input and output unit whether or not combined 8471 41 10 – Micro computer 8471
41 20 – Large or main frame computer 8471
41 90 – Other 8471 49 00
Also Read: https://newslaw.in/case-type/criminal/analysis-of-cheating-and-forgery-in-passport-case/
– Other, presented in the form of systems 8471 50 00 – Processing units other than those of subheading 8471 41 or 8471 49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units (Emphasis Applied) In this respect the CESTAT relied on dictionary meaning of the word ‘portable’ to hold that the goods were rightly classified under ‘Tariff Item 8471 30 10”; b) The absence of in-built power source does not render the Concerned Goods as non-portable; c) The dimensions of the Concerned Goods as well as the fact that it was not foldable did not impact the element of portability; d) The Concerned goods had a display unit, a touch screen which could function as a keyboard and thus it fulfilled the description mentioned under ‘Tariff Item 8471 30 10’. Hence, the only limited question that falls for consideration before us in these proceedings is whether the Concerned Goods are ‘portable’ or not under ‘Tariff Item 8471 30 10’.
In this respect, he pointed out that the relevant ‘Sub-Heading 8471 30’ which entails the condition of being ‘portable’ in the description of goods was preceded by a single ‘-’ and consequently all the goods under the said sub-heading should be taken as a sub classification of the goods covered by the ‘Heading 8471’. Arjit Prasad, learned senior counsel for the Respondent while supporting the observations in the impugned decisions, put forth two counter arguments. In furtherance of this argument, he relied on the Constitution Bench decision of this Court in Mathuram Agrawal v State of MP to urge that the intention of the legislature has to be discerned from the plain and unambiguous meaning of the language used in a taxation statute and any other interpretation is impermissible. It may be clarified that presently certain models of the Concerned Goods even exceed this aspect by having the display’s diagonal length as wide as 25 inches while still being weighed under 10 kilograms; e) It needs a constant source of external power source to function; f) It is non-foldable and cannot be carried around in the usual laptop bags because of its dimensions; g) The Concerned Goods for efficient functioning need to remain in a vertical state and to be tethered to a stand which is provided along with it or requires support of something else such as a wall. While it appears well settled that the HSN is to be normally taken as a safe guide for classifying goods under the First Schedule because it is based on an internationally recognized ‘harmonized nomenclature’, a bare reading of the explanatory note applicable to the sub-heading clearly lays out the fact that there is no mandatory condition for being operable without any external source of power.
The second aspect deals with the question as to whether mere factum of weighing less than 10 kilograms would be sufficient to classify the Concerned Goods as ‘portable’ or not. We say so for the reason that these sources, despite being a treasure trove of knowledge, are based on a crowd-sourced and user-generated editing model that is not completely dependable in terms of academic veracity and can promote misleading information as has been noted by this court on previous occasions also.
If special type of goods is subject-matter of a fiscal entry then that entry must be understood in the context of that particular trade, bearing in mind that particular word. A portable computer is larger than a laptop computer, but is still easily movable” The Oxford Dictionary of Computer Science defines ‘portable’ in respect of computers as – “A computer that can be simply carried from one place to another by one person. Batteries or transformer pack Easy to carry in a briefcase; sometimes uses RAM drive or EPROM instead of floppy or hard drive; thinner models are known as notebook computers.
The second ingredient is that the ADP must be suitable for daily transit of a consumer and would include aspects such as durability to withstand frequent commute and damage protection. The user guides also emphatically highlight that the Concerned Goods were meant to be used at a fixed place and contained specifications that made them ideal for being mounted on a wall. Keeping in view the applicable understanding of the element of ‘portable’ as understood in common parlance used in the trade of ADPs, we must hold that the Concerned Goods are not portable for the reasons that- Firstly, the diagonal dimension of the Concerned Goods being minimum of the length of 18.5 inches and the same needs to be transported along with the power cable as well as the applicable stand in most cases if it is to be mounted and; secondly there being no protective case designed by the markets for daily transport for these Concerned Goods.
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In light of the abovementioned discussion, we allow the appeals and set aside the impugned orders which classified the Concerned Goods under ‘Tariff Item 8471 30 10’.
Case Title: HEWLETT PACKARD INDIA SALES PVT.LTD.(NOW HP INDIA SALES PVT. LTD) Vs. COMMISSIONER OF CUSTOMS (I) NHAVA SHEVA (2023 INSC 50)
Case Number: C.A. No.-005373 / 2019
