The Supreme Court has on 17 January 2023 held that Automatic Data Processing Machines (‘ADP’) which are popularly known as ‘All-in-One Integrated Desktop Computer’ are to be classified under Tariff Item 8471 50 00 of the Customs Tariff Act, 1975 and not under Tariff Item 8471 30 10 ibid.
The Apex Court in the case Hewlett Packard India Sales Pvt. Ltd. v. Commissioner rejected the Revenue department’s contention that the goods were ‘portable’ (as weighed less than 10 kgs) and hence were to be classified under TI 8471 30 10.
Word ‘portable’ to be defined in reference to ADPs
Allowing assessee’s appeal, the Court approved the plea that though the word ‘portable’ was not defined in the statute, it should have been defined in reference to the ADPs instead of relying on the dictionary meaning which contains all kinds of hues of associated meanings. It noted that the word ‘portable’ was incorporated in subheading 8471 30 which was preceded by a single, which meant that the classification of goods under the same would be taken as a sub-classification of the ‘Heading 8471’ which covered ADP machines.
Weight not the sole criteria for portability
The Supreme Court also perused relevant technical and commercial literature and summarised that weight cannot be the sole factor to determine the factum of portability.
Impact of technical advancement on law
Highlighting the impact of technological advancement on law, the Court also noted that scientific progress has greatly reduced the weight associated with high performance in the context of ADPs. It observed that weight was an important criterion for deciding whether any ADPs was ‘portable’, when the relevant entries of the First Schedule to the Customs Tariff Act came into effect.
Criteria for portability
The Apex Court further laid down essential ingredients to logically establish whether an ADP is ‘portable’. According to it the first ingredient is their ability to be carried around easily which includes all aspects such as weight and their dimensions. 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.
On facts of the case, the Court noted that dimensions of the concerned goods made it illogical and unviable for daily transit. It noted that the user guides also highlighted that the goods were meant to be used at a fixed place and contained specifications that made them ideal for being mounted on a wall.
Use of online sources like Wikipedia cautioned
The Supreme Court also sounded a note of caution against using online sources such as Wikipedia for legal dispute resolution. The Court in this regard reiterated that these sources, despite being a treasure trove of knowledge, are based on a crowdsourced and usergenerated editing model that is not completely dependable in terms of academic veracity and can promote misleading information. According to the Court, the courts and adjudicating authorities should rather make an endeavour to persuade the counsels to place reliance on more reliable and authentic sources.
