REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO 5373 OF 2019
Hewlett Packard India Sales Pvt. Ltd. 
(Now HP India Sales Pvt. Ltd.) … Appellant
                                             VERSUS
Commissioner of Customs (Import), Nhava Sheva … Respondent
WITH
CIVIL APPEAL NO 6715 OF 2019
Lenevo (India) Pvt. Ltd. … Appellant
                                             
                         VERSUS
Commissioner of Customs (Import), Nhava Sheva … Respondent
JUDGMENT
Surya Kant, J.
1. The question that arises for our consideration pertains to correct
classification   of   Automatic   Data   Processing   Machines   (hereinafter,
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‘ADP’)   which   are   popularly   known   as   ‘All­in­One   Integrated   Desktop
Computer’   (hereinafter,   ‘Concerned   Goods’)   under   the   First   Schedule
to the Central Excise Tariff Act, 1985 (hereinafter, ‘First Schedule’). 
F ACTS     
2. The   Appellants   imported   certain   units   of   the   Concerned   Goods
and classified them under ‘Tariff Item 8471 50 00’ as per the prevalent
self­assessment   procedure.   During   subsequent   examination   by   the
Custom Authorities, the Concerned Goods were classified under ‘Tariff
Item   8471   30   10’,   which   was   later   confirmed   by   the   Assistant
Commissioner   of   Customs   and   Commissioner   of   Customs   (Appeal).
These   findings   were   further   affirmed   by   the   Customs,   Excise   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
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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 1
(1) Description of goods 2
(2)
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
8471 30 ­   Portable   digital   automatic   data
processing   machines,   weighing   not
more   than   10   kg,   consisting   of   at
least   a   central   processing   unit,   a
1  Additional Notes to The Customs Tariff Act 1975, sch 1 states that ­
1(a)   “Heading”,   in   respect   of   goods,   means   a   description   in   list   of   tariff   provisions
accompanied by a four­digit number and includes all sub­headings of tariff items the
first four­digits of which correspond to that number.
  (b)“Sub­heading” ”, in respect of goods, means a description in list of tariff provisions
accompanied by a six­digit number and includes all tariff items the first six­digits of
which correspond to that number.
   (c)“Tariff Item” means a description in list of tariff provisions accompanied by a six­
digit   number   means   a   description   of   goods   in   the   list   of   tariff   provisions
accompanying   either   eight­digit   number   and   the   rate   of   the   duty   of   excise   or   eight­
digit number with blank in the column of the rate of duty.
2  General Explanatory Notes to The Customs Tariff Act 1975, sch 1 states that ­
1.   Where   in   column   (2)   of   this   Schedule,   the   description   of   an   article   or   group   of
articles under a heading is preceded by “­”, the said article or group of articles shall
be   taken   to   be   a   sub   classification   of   the   article   or   group   of   articles   covered   by   the
said   heading.   Where,   however,   the   description   of   an   article   or   group   of   articles   is
preceded   by   “­­”,   the   said   article   or   group   of   articles   shall   be   taken   to   be   a   sub­
classification   of   the   immediately   preceding   description   of   the   article   or   group   of
articles   which   has   “­”.   Where   the   description   of   an   article   or   group   of   articles   is
preceded by  “­­­” or  “­­­­”, the  said article  or group  of articles  shall be  taken to  be a
sub­classification   of   the   immediately   preceding   description   of   the   article   or   group   of
articles which has “­” or “­­”.
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keyboard and a display
8471 30 10 ­­­ Personal computer
8471 30 90
­­­  Other 
­ Other   automatic   data   processing
machines
8471 41
­­   Comprising   in   the   same   housing   at
least a central  processing  unit and  an
input   and   output   unit   whether   or   not
combined
8471 41 10
­­­  Micro computer
8471 41 20
­­­  Large or main frame computer
8471 41 90
­­­  Other
8471 49 00
­­   Other,   presented   in   the   form   of
systems
8471 50 00 ­   Processing   units   other   than   those
of   subheading   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;
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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. C ONTENTIONS     
6. We   have   heard   learned   counsel   for   the   parties   and   perused   the
documents produced on record. It must be noted that both sides have
not   disputed   the   findings   of   the   adjudicating   authorities   except   in
respect   of   the   aspect   of   portability   of   Concerned   Goods.   Hence,   the
only   limited   question   that   falls   for   consideration   before   us   in   these
proceedings   is   whether   the   Concerned   Goods   are   ‘portable’   or   not
under ‘Tariff Item 8471 30 10’.
7. Mr. V Lakshmikumaran, learned counsel for the Appellants, has
made   four   key   contentions.   Firstly ,   that   ‘Tariff   Item   8471   30   10’
pertains   to   class   of   ADPs   which   are   popularly   known   as   laptops   or
notebooks. He has highlighted that the classification under ‘Tariff Item
8471   30   10’     involves   an   element   of   ‘functionality’   which   is   not
applicable in the present case as Concerned Goods are not capable of
functioning   without   an   external   source   of   power.   Secondly,   he
contended   that   Concerned   Goods   have   been   wrongly   held   to   be
‘portable’ by the CESTAT on the sole aspect that their weight was less
than   10   kilograms.   He   argued   that   mere   weight   cannot   be   the   sole
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consideration for deciding whether any good is ‘portable’ or not, and it
is   necessary   to   consider   additional   aspects   such   as   functionality   and
ease   of   transportability   which   is   suitable   for   a   mobile   lifestyle   of   the
user.   Thirdly,   he   urged   that   the   CESTAT   erroneously   relied   on   the
general   definition   of   ‘portable’   given   in   dictionaries   and   instead   the
same   should   have   been   defined   in   relation   to   the   class   of   goods,   i.e.
ADPs.   In   this   respect,   he   pointed   out   that   the   relevant   ‘Sub­Heading
8471   30’   which   entails   the   condition   of   being   ‘portable’   in   the
description of goods was preceded by a single ‘­’ and consequently all
the   goods   under   the   said   sub­heading   should   be   taken   as   a   sub
classification   of   the   goods   covered   by   the   ‘Heading   8471’.   Finally,   to
buttress   the   aforementioned   arguments,   he   highlighted   that   the
Concerned   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  (hereinafter,  ‘HSN’).  We  must  also  bring   to
the   fore   and   appreciate   the   efforts   of   learned   counsel   for   the
Appellants   who   physically   demonstrated   by   setting   up   one   of   the
sample   units   of   the   Concerned   Goods   to   showcase   the   aspects   of
portability involved in present matter.
8. On the contrary, Mr. Arjit Prasad, learned senior counsel for the
Respondent   while   supporting   the   observations   in   the   impugned
decisions,   put   forth   two   counter   arguments.   Firstly ,   that   since   the
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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 3
  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.
A NALYSIS   
10. Before   we   ponder   over   the   question   whether   the   Concerned
Goods   are  ‘portable’   or  not,   it  would  be  appropriate   to  highlight  their
key characteristics which are as follows :­
a) The central processing unit is embedded within the display unit; 
b) The   display   unit  is  generally   a  touch  screen  which   can   be   used
as   an   input   unit   also,   such   as   in   the   capacity   of   a   keyboard   or   a
mouse;
3    Mathuram Agrawal v State of MP  (1999) 8 SCC 667, para 12.
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c) The units generally come along with in­built speakers as well as
ports   for   further   connectivity   including   a   port   for   establishing   links
with internet network;
d) The   diagonal   length   of   the   display   is   at   the   minimum   of   18.5
inches.   It   may   be   clarified   that   presently   certain   models   of   the
Concerned   Goods   even   exceed   this   aspect   by   having   the   display’s
diagonal   length   as   wide   as   25   inches   while   still   being   weighed   under
10 kilograms; 4
 
e) It needs a constant source of external power source to function;
f) It   is   non­foldable   and   cannot   be   carried   around   in   the   usual
laptop bags because of its dimensions;
g) The Concerned Goods for efficient functioning need to remain in
a vertical state and to be tethered to  a stand which is provided along
with it or requires support of something else such as a wall. It must be
noted that the user guides brought on record in respect of one of the
models   of   the   Concerned   Goods   indicate   that   any   other   method   of
usage including horizontal  use was harmful and could cause damage
to the Concerned Goods.
11. The   first   aspect   which   we   will   address   is   with   respect   to   the
issue   of   constant   source   of   power   and   whether   the   same   is   a
necessary   characteristic   to   treat   goods   as   ‘portable’.   In   this   respect,
the Appellants argued that ‘Tariff Item  8471 30 10’ is only applicable
4   It must be noted that in respect of current market trends, generally the largest display for
laptops/notebooks is around 17 inches. 
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to   laptops/notebooks   and   that   the   applicable   sub­heading   HSN
indicated this. The relevant part of the same reads as follows –
“Subheading 8471.30
This   subheading   covers   portable   automatic   data   processing
machines   weighing   not   more   than   10   kg.   These   machines,
which   are   equipped   with   a   flat   screen,   may   be   capable   of
operating   without   an   external   source   of   electric   power   and
often   have   a   modem   or   other   means   for   establishing   a   link
with a network.”
(Emphasis Applied)
12. 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’ 5
,   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
built­in   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
5   Collector of Central Excise, Shillong v Wood Craft Products Limited  (1995) 3 SCC 454.
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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
Respondent before us also.
14. At   the   outset,   we   must   note   that   the   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.   While   we
expressly acknowledge the utility of these platforms which provide free
access to knowledge across the globe, but we must also sound a note
of caution against using such sources for legal dispute resolution. We
say so for the reason 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 as has been noted by
this   court   on   previous   occasions   also. 6
  The   courts   and   adjudicating
authorities should rather make an endeavor to persuade the counsels
to place reliance on more reliable and authentic sources.
15. Moving   forward,   we   must   now   address   the   issue   at   hand,
namely, the interpretation of the word ‘portable’ and more so when the
6   Commissioner of Customs, Bangalore v Acer India (P) Ltd.  (2008) 1 SCC 382, para 17.
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reasoning  of  the  CESTAT  solely   hinges  on   the  aspect  of  weight.  Such
an approach is apparently erroneous because despite the fact that the
‘portable’   was   not   defined   under   the   statute,   it   was   incorporated   in
‘Sub­Heading 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’. 
16. In other words,  ‘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  CCE
v   Krishna   Carbon   Paper   Co. 7
.   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. It thus holds that :–
“10.   The   trade   meaning   is   one   which   is   prevalent   in   that
particular trade where the goods is known or traded.  If special
type   of   goods   is   subject­matter   of   a   fiscal   entry   then   that
entry   must   be   understood   in   the   context   of   that   particular
trade,   bearing in  mind  that   particular   word.   Where,  however,
there is no evidence either way then the definition given and
the meaning following ( sic   flowing) from particular statute at
particular time would be the decisive test.” 8
(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
7   CCE v Krishna Carbon Paper Co.  (1989) 1 SCC 150, para 6.
8  ibid, para  10.
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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” 9
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” 10
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   necessarily   be   used   in
transit. Examples include laptop computers.” 11
The   Microsoft   Computer   Dictionary   also   provides   a   definition   along
with   an   illustrative   chart   depicting   various   types   of   ‘portable
computers’ –
“Any   computer   designed   to   be   moved   easily.   Portable
computers can be characterized by size and weight.” 12
 
Type Approximate
weight Power
source Comments
9   The Institute of Electrical and Electronics Engineers,   IEEE Standard Computer Dictionary
(1990) 155.
10   Douglas   A.   Downing   and   others,   Dictionary   of   Computer   and   Internet   Terms   (10th   edn,
Barron’s Educational Series 2009) 374.
11   Andrew   Butterfield   and   Gerard   Ekembe   Ngondi   (eds),   Oxford   Dictionary   of   Computer
Science  (7th edn, OUP 2016).
12  Alex Blanton (ed),  Microsoft Computer Dictionary  (5th edn, 2002) 412­413.
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Transportable 15–30 lb. House
current Sometimes   called
luggable;   usually
has   floppy   and
hard   drives;
standard   CRT
screen.
Laptop 8–15 lb. House
current   or
batteries Can   be   held   on
the   lap;   usually
has   a   floppy
drive;   uses   flat
LCD   or   plasma
screen.
Ultralight 2–8 lb. Batteries   or
transformer
pack Easy to carry in a
briefcase;
sometimes   uses
RAM   drive   or
EPROM instead of
floppy   or   hard
drive;   thinner
models are known
as   notebook
computers.
Handheld Less   than   2
lb. Batteries   or
transformer
pack Also   called
palmtop   or   palm­
sized; can be held
in one hand.
18. 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
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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.
19. 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
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,
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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 use this opportunity to highlight the
impact of technological advancement on law. It’s a matter of fact that
at the time when the relevant entries of the First Schedule came into
effect,   weight   was   definitely   an   important   criterion   for   deciding
whether   any   ADPs   was   ‘portable’.   Scientific   progress   has   greatly
reduced the weight associated with high performance in the context of
ADPs.   It   is   not   surprising   that   the   advent   of   LED   technology,   faster
microchips,   etc.   has   made   it   possible   for   mobile   phones   to   have
performance   specifications   which   merely   a   decade   ago   was   possible
only on high end laptops. We must therefore be cognizant of such an
impact on the consumer’s understanding of any good or trade. 
 
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22. 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’.
23. 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. 13
  Hence under the
prevalent   self­assessment   procedure,   the   classification   submitted   by
the Appellants must be accepted. 
 
C ONCLUSION       
24. In light of the abovementioned discussion, we allow the appeals
and   set   aside   the   impugned   orders   which   classified   the   Concerned
Goods   under   ‘Tariff   Item   8471   30   10’.   It   is   directed   that   valuation   of
the   Concerned   Goods   for   levy   of   the   duty   be   determined   under   the
13   Dabur India Ltd. v CCE, Jamshedpur  (2005) 4 SCC 9.
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initially declared ‘Tariff Item 8471 50 00’. All necessary consequences
shall follow.
25. The appeals are disposed of along with any pending applications
in the above terms. 
………..………………… J.
(SURYA KANT)
………………………….. J.
(VIKRAM NATH)
NEW DELHI
DATED:17.01.2023
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