9911796707
TMI Blog2023 (1) TMI 700X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se and Service Tax Appellate Tribunal (hereinafter, 'CESTAT'), West Zonal Bench, Mumbai vide the impugned judgments dated 19.12.2018 and 24.06.2019. 3. While the rate of duty is same under both the Tariff Items, the method of computing them is different. Goods under 'Tariff Item 8471 30 10' attract the application of Section 4A of Central Excise Act, 1944, which valued the excisable goods on the basis of percentage of retail sale price. 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. This difference in liability is the precise reason behind the present dispute regarding classification under the correct Tariff Item which calls for adjudication. 4. Before delving into the reasoning of the revenue authorities and CESTAT, which is more or less identical, it would be appropriate to reproduce the following relevant parts of the First Schedule :- Heading/ Sub-Heading/ Tariff Item Additional Notes to The Customs Tariff Act 1975, sch 1 states that 1( a) "Heading", in respect of goods, means a descriptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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) 5. Since, the reasoning confirming the classification under 'Tariff Item 8471 30 10' by the adjudicating authorities including CESTAT is identical, hence, it would be sufficient to discuss the key findings of the impugned decisions in brevity. These observations are : a) The Concerned Goods weighed less than 10 kilogram and were easily carried from one place to another. 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 inbuilt power source does not render the Concerned Goods as nonportable; 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'. B. CONTENTIONS 6. We have heard learned counsel for the parties and perused the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the Respondent while supporting the observations in the impugned decisions, put forth two counter arguments. Firstly, that since the word 'portable' is nowhere defined in the statute, it should be interpreted on the principle of general parlance. In other words, he submitted that the dictionary meaning of the word 'portable' is sufficient to resolve the dispute regarding its interpretation. Secondly, he maintained that the legislature's intention was crystal clear in qualifying the term 'portable' by providing the condition in the description that any ADP less than 10Kgs would automatically become portable. In furtherance of this argument, he relied on the Constitution Bench decision of this Court in Mathuram Agrawal v State of MP Mathuram Agrawal v State of MP (1999) 8 SCC 667, para 12 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. 9. We now examine these contentions of both parties. ANALYSIS 10. Before we ponder over the question whether the Concerned Goods are 'portable' or not, it would be appropriate to highlight the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enclature' Collector of Central Excise, Shillong v Wood Craft Products Limited (1995) 3 SCC 454 , 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. We are thus unable to agree with the Appellants that only ADPs with a built-in power source is necessarily required to be classified under 'Tariff Item 8471 30 10'. In other words, no element of 'functionality' is contemplated for the purpose of classifying the Concerned Goods as 'portable'. 13. 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. In this respect, it may be seen that the CESTAT vide its impugned order(s) has relied on the dictionary meaning which defined 'portable' as " that can be easily carried and not permanently fixed in a place". It then went on to conclude that the dimensions of the Concerned Goods were not a concern as long as it could be easily lifted and moved. As noted above, a similar argument has been raised by learned senior counsel for the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g (sic flowing) from particular statute at particular time would be the decisive test." ibid, para 10 (Emphasis Applied) 17. In our considered opinion, the word 'portable' should have been interpreted in the context of ADPs. In this regard, relevant technical and commercial literature has been perused by us. On a minute analysis thereof, we deem it appropriate to extract the following relevant material: The Institute of Electrical and Electronics Engineers defines 'portable computer' as " A personal computer that is designed and configured to permit transportation as a piece of handheld luggage" The Institute of Electrical and Electronics Engineers, IEEE Standard Computer Dictionary (1990) 155 The Dictionary of Computer and Internet Terms defines it as " able to be carried around. A portable computer is larger than a laptop computer, but is still easily movable" Douglas A. Downing and others, Dictionary of Computer and Internet Terms (10th edn, Barron's Educational Series 2009) 374 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. They cannot necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must not be usually made on the advertisement material of the manufacturer, the user guides produced before us 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. 20. 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 us, 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. 21. Furthermore, we must also u ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
