The Hon’ble Supreme Court in Hewlett Packard India Sales Pvt. Ltd. & Anr. v. Commissioner of Customs (Import), Nhava Sheva [Civil Appeal No. 5373 and 6715 of 2019, dated January 17, 2023] set aside the orders of CESTAT, Mumbai, which classified the Integrated Desktop Computer as a portable device. Held that, such goods cannot be classified as ‘portable’ for the reasons that their dimensions make it illogical and unviable for daily transit and the same needs to be transported along with the power cable as well as the applicable stand if it is to be mounted. Further, the consumer is unable to carry them around in the absence of any protective case or any covering bags.
Hewlett Packard India Sales Pvt. Ltd. and Lenovo (India) Pvt. Ltd. (“the Appellants”) imported certain units of Automatic Data Processing Machines popularly known as ‘All in One Integrated Desktop Computer’ (“the Goods”) and classified them under ‘Tariff Item 8471 50 00’ of Schedule I to the Central Excise Tariff Act, 1985 (“the Central Excise Tariff Act”) i.e. ‘Processing units other than those of sub- headings 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‘, as per the prevalent self-assessment procedure.
During subsequent examination by the Custom Authorities (“the Respondent”) the Goods were classified under ‘Tariff Item 8471 30 10’ of Schedule I to the Central Excise Tariff Act, as ‘Personal computer’ under the ‘Sub-heading 8471 30’ which entails the condition of being ‘portable’, that was later affirmed by the CESTAT, Mumbai vide orders dated December 19, 2018 and June 24, 2019 (“the Impugned Orders”).
Being aggrieved, this appeal has been filed.
The Appellants contended that firstly, the classification under ‘Tariff Item 8471 30 10’ pertains to class of the Goods which are popularly known as laptops or notebooks and it involves an element of ‘functionality’ which is not applicable in the case of their Goods, as they cannot function without an external source of power. Secondly, the Goods are wrongly held to be portable on the ground that they weigh less than 10 kilograms, and finally that the Goods are not considered as ‘portable’ by the European Commission’s classification and are also not covered by the ‘Tariff Item 8471 30 10’ as per the World Customs Organization’s Harmonized System Explanatory Notes (“the Explanatory Notes”).
Whether the Goods are classifiable under ‘Tariff Item 8471 30 10’ as ‘Portable device’?
The Hon’ble Supreme Court in Civil Appeal No. 5373 and 6715 of 2019 held as under:
Tariff Item 8471’ of Schedule I to the Central Excise Tariff Act:
|Description||Unit||Rate of duty|
|8471||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|
|847130||Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display:|
|84715000||Processing units other than those of sub- headings 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||u||12.5%”|
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