Central Excise Tariff Act, 1985 – Central Excise Act, 1944 – ss.4A and 4 – Appellants imported certain units of the ‘All-in-one integrated Desktop computer’ and classified them under ‘Tariff Item 8471 50 00’ as per the prevalent self-assessment procedure – During subsequent examination by the Custom Authorities, the concerned goods were classified under ‘Tariff Item 8471 30 10’, and this classification was confirmed by various Adjudicating Authorities – Adjudicating Authorities held that the concerned goods were portable and were thus correctly classified under ‘Tariff Item 8471
30 10’ – Whether the concerned goods are ‘portable’ or not under ‘Tariff Item 8471 30 10’ – Held: 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 – Secondly, there being no protective case designed by the markets for daily transport for these concerned goods – Such requirements make the concerned goods unable to be carried around easily during daily transit – Therefore, the concerned goods are not ‘portable’ – Since the Customs Authorities wanted to classify the goods differently, the burden of proof to showcase the same was on them, which they failed to discharge – Impugned orders set aside, which classified the concerned goods under ‘Tariff Item 8471 30 10’ – Valuation of concerned goods for levy of duty be determined under the initially declared ‘Tariff Item 8471 50 00’.
Allowing the appeals, the Court
HELD:1. On a conjoint reading of the relevant material and inputs, it is explicitly clear that weight cannot be the sole factor to determine the factum of portability. Instead, the essential ingredients to logically establish whether an Automatic Data Processing Machines (ADP) is ‘portable’ are twofold. The first ingredient is their ability to be carried around easily which includes all aspects such as weight and their dimensions. This Court must hasten to add that in appropriate cases, this assessment would also take into consideration the necessary accessories which are required for safe and efficient usage such as mounted stands or any power adapters. 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. An example of the same would be the availability of protection cases which allows users to carry the ADPs in hand or possibility of carrying the same in normal briefcases or shoulder bags. [Para 18][1134-B-D]
2. On applying these core ingredients to the characteristics of Concerned Goods, there is no room to doubt that they are not ‘portable’. Firstly, the dimensions of the Concerned Goods make it illogical and unviable for daily transit. While it is true that classification of the goods must not be usually made on the advertisement material of the manufacturer, the user guides produced before this Court showcase that placing the product in other than the specified orientation could lead to damage to the Concerned Goods. 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. Secondly, the inability of the consumer to carry these goods around in the absence of any protective case or any covering bags, which makes the Concerned Goods vulnerable to damage during transit. As noted in the literature relied upon before this Court, the weight was not the sole consideration for being considered as ‘portable’. For example, there used to be computers which are now no longer in common use which were popularly known as ‘luggable’. They used to weigh more than 10 kilograms. These old predecessors of laptops were designed at the relevant time to be portable and used to fold up neatly in one box with a handle. Despite their weight and the size comparable to small suitcase, they could still be transported, albeit without a wagon. [Paras 19 and 20][1134-E-H; 1135-A]
3. Keeping in view the applicable understanding of the element of ‘portable’ as understood in common parlance used in the trade of ADPs, this Court 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. Such requirements make the Concerned Goods unable to be carried around easily during daily transit. This, thus, hold that the Concerned Goods are not ‘portable’. [Para 22][1135-DF]
4. It goes without saying that since the customs authorities wanted to classify the goods differently, the burden of proof to showcase the same was on them, which they failed to discharge. Hence under the prevalent self-assessment procedure, the classification submitted by the appellants must be accepted. [Para 23][1135-F-G]
CCE v Krishna Carbon Paper Co. (1989) 1 SCC 150; [1988] 3 Suppl. SCR 12 – relied on.
Mathuram Agrawal v State of MP (1999) 8 SCC 667: [1999]
4 Suppl. SCR 195; collector of Central Excise, Shillong v Wood Craft Products Limited (1995) 3 SCC 454 : [1995]
2 SCR 797; Commissioner of Customs, Bangalore v Acer India (P) Ltd. (2008) 1 SCC 382: [2007]11 SCR 558; Dabur India Ltd. v CCE, Jamshedpur (2005) 4 SCC 9 : [2005] 3 SCR 144 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.