2023 (1) TMI 700 - SC - Customs
Classification of imported Automatic Data Processing Machines (ADP) popularly known as All in One Integrated Desktop Computer - to be classified under Tariff Item 8471 50 00 or under Tariff Item 8471 30 10? - whether the Concerned Goods are ‘portable’ or not under Tariff Item 8471 30 10? - HELD THAT:- 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’ COLLECTOR OF CENTRAL EXCISE, SHILLONG VERSUS WOOD CRAFT PRODUCTS LTD. [1995 (3) TMI 93 - SUPREME COURT], a bare reading of the explanatory note applicable to the subheading clearly lays out the fact that there is no mandatory condition for being operable without any external source of power - the Appellants contention that only ADPs with a built-in power source is necessarily required to be classified under ‘Tariff Item 8471 30 10’, cannot be agreed upon.
Whether mere factum of weighing less than 10 kilograms would be sufficient to classify the Concerned Goods as ‘portable’ or not? - HELD THAT:- The word ‘portable’ should have been defined in reference to the ADPs instead of relying on dictionary meaning which contains all kinds of hues of associated meanings as held by this Court in COLLECTOR OF CENTRAL EXCISE, KANPUR VERSUS KRISHNA CARBON PAPER CO. [1988 (9) TMI 50 - SUPREME COURT]. The cited decision also explains the correct approach to be taken in case when a word is to be defined in context of any entry under the First Schedule.
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 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. We 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.
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. Such requirements make the Concerned Goods unable to be carried around easily during daily transit. We, thus, hold that the Concerned Goods are not ‘portable’.
The impugned orders which classified the Concerned Goods under ‘Tariff Item 8471 30 10’ is set aside - It is directed that valuation of the Concerned Goods for levy of the duty be determined under the initially declared ‘Tariff Item 8471 50 00’ - appeal allowed.