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2023-TIOL-08-SC-CUS
Hewlett Packard India Sales Pvt Ltd Vs CC
Cus - Question that arises for consideration pertains to correct classification of Automatic Data Processing Machines (ADP) [Concerned Goods] which are popularly known as 'All-in-One Integrated Desktop Computer' under the First Schedule to the Central Excise Tariff Act, 1985 – On import the appellants classified the same under 8471 50 00 whereas the Customs authorities classified the same under 8471 30 10 and which orders were affirmed by the Tribunal vide the impugned judgments dated 19.12.2018 = 2019-TIOL-1807-CESTAT-MUM and 24.06.2019 = 2019-TIOL-2101-CESTAT-MUM - While the rate of duty is same under both the Tariff Items, the method of computing them is different – Inasmuch as goods under Tariff Item 8471 30 10 attract the application of Section 4A whereas when classified under 8471 50 00, the valuation is as per s.4 of the CEA, 1944 and 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 – The reasoning confirming the classification under Tariff Item 8471 30 10 by the adjudicating authorities including CESTAT is identical and which is that the goods weighed less than 10 kilogram and were easily carried from one place to another; dictionary meaning of the word 'portable' to hold that the goods were rightly classified under TI 8471 30 10; absence of inbuilt power source does not render the Concerned Goods as non-portable; dimensions of the goods as well as the fact that it was not foldable did not impact the element of portability; that the goods had a display unit, a touch screen which could function as a keyboard and thus it fulfilled the description mentioned under TI 8471 30 10.
Held: The only limited question that falls for consideration in these proceedings is whether the Goods are 'portable' or not under 'Tariff Item 8471 30 10' - 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 – Bench is, therefore, 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' - 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" - Adjudicating authorities while coming to their respective conclusions, especially the Commissioner of Customs (Appeal) have extensively referred to online sources such as Wikipedia to support their conclusion - 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 - Despite the fact that the 'portable' was not defined under the statute, it was incorporated in SH 8471 30 and was preceded by a single “-”, which meant that classification of goods under the same would be taken as a sub-classification of the Heading 8471 - In Bench's considered opinion, the word 'portable' should have been interpreted in the context of ADPs - On a conjoint reading of the relevant material and inputs [ The Institute of Electrical and Electronics Engineers, Dictionary of Computer and Internet Terms, Oxford Dictionary of Computer Science, Microsoft Computer Dictionary defining ‘portable computer' ], it is explicitly clear that weight cannot be the sole factor to determine the factum of portability - 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 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 - 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 - 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 – Appeals are allowed by setting aside the impugned orders which classified the Concerned Goods under 'Tariff Item 8471 30 10' - Valuation of the Concerned Goods for levy of the duty be determined under the initially declared 'Tariff Item 8471 50 00': Supreme Court [para 6, 12, 13, 14, 15, 17, 18, 19, 22, 23, 24]
- Appeals allowed: SUPREME COURT OF INDIA
2023-TIOL-79-HC-DEL-CUS
Caprico International Pte Ltd Vs CC
Cus - Petitioner seeks issuance of a direction to Respondent No. 1- Commissioner of Customs for releasing the consignment as importer did not pay the customs duty - hence, the goods were not cleared; further seeks cancellation of the previous bill of entry filed with the customs in favour of M/s Earth Wire Private Limited, and permit the Petitioner to file a new bill of entry as per new consignee.
Held: While the importer may have been the initial beneficiary, in view of the events which have transpired, after the initial bill of entry was drawn in favour of the importer, the ownership would now have to be recognised in favour of the Petitioner - It is the Petitioner who had supplied the goods and has now received all the original documents from the Bank - The Petitioner is willing to bear the customs duty and interest - However, the point to contest is the detention/demurrage charges between the parties - Position that emerges from the settled case laws is that if the importer is at fault, demurrage would be liable to be paid - Though there may be no illegality in the release of the goods in the favour of the Petitioner now, the Customs authorities cannot be made to bear the burden of detention/demurrage charges, especially when they proceeded in accordance with the provisions of the Customs Act, 1962 - Since the Petitioner is now seeking release of the goods, in the facts and circumstances of the present case and the legal position discussed above, the following directions are issued viz. Since there is no explanation for the delay between September 2022 to December, 2022 and the first representation itself was made on 3rd December, 2022, the Petitioner would be liable to pay 50% of the detention/demurrage charges payable till 3rd December, 2022 and also demurrage charges for the period from 3rd December, 2022 till date - Petition disposed of: High Court [para 12, 21, 26, 27]
- Petition disposed of: DELHI HIGH COURT |
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