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of <h1>Tribunal rules laptops not subject to additional duty, distinguishing them from desktops</h1> <h3>Commr. Of Customs, Bangalore Versus M/s ACER India Pvt. Ltd</h3> Commr. Of Customs, Bangalore Versus M/s ACER India Pvt. Ltd - 2007 (218) E.L.T. 17 (SC), 2007 AIR 1739, 2007 (11) SCR 558, 2008 (1) SCC 382 Issues Involved:1. Classification of notebook computers (laptop computers) under the Customs Tariff Act.2. Applicability of additional duty on notebook computers as per the Computers (Additional Duty) Rules, 2004.3. Interpretation of relevant entries in the Customs Tariff Act.4. Determination of duty when goods consist of a set of articles under Section 19 of the Customs Act.Detailed Analysis:Issue 1: Classification of Notebook Computers (Laptop Computers)The primary question was whether notebook computers (laptop computers) are classified as 'CPU with monitor, mouse, and keyboard imported together as a set' under Sl. No. 2 of the Table in Rule 2 of the Computers (Additional Duty) Rules, 2004, and thus subjected to an additional duty of 7%. The Tribunal and the Commissioner (Appeals) had previously ruled against this classification.Issue 2: Applicability of Additional DutyThe Customs Tariff Act, specifically Section 3, provides for the levy of additional duty equal to excise duty to protect domestic manufacturers and ensure a level playing field. The relevant entries in the Customs Tariff Act's schedule include various types of digital automatic data processing machines and their components. The Central Government, under the Computers (Additional Duty) Rules, 2004, specified additional duty rates for CPUs and CPUs with monitors, mice, and keyboards imported as a set.Issue 3: Interpretation of Relevant EntriesThe court examined the entries in the Customs Tariff Act, noting that traditional desktops and their components are distinctly classified and known differently in commercial parlance compared to laptops. Desktops are a combination of separate components (CPU, monitor, mouse, keyboard) that retain their individual identities and can be marketed and used separately. In contrast, laptops are integrated and inseparable units, not a set of individual components.Issue 4: Determination of Duty for Sets of ArticlesSection 19 of the Customs Act addresses the determination of duty for goods consisting of a set of articles, specifying that duty should be calculated based on the highest rate applicable to any component in the set. However, the court found that laptops, being integrated items, do not qualify as a set of CPU, monitor, mouse, and keyboard.Conclusion:The court concluded that laptops and desktops are fundamentally different in commercial parlance and structure. Laptops, being integrated items, cannot be classified as a set of CPU, monitor, mouse, and keyboard. The Tribunal's interpretation that laptops do not fall under the classification requiring a 7% additional duty was upheld. The appeal by the Revenue was dismissed, affirming that laptops are not subject to the additional duty applicable to desktops imported as sets. The judgment emphasized the need for strict interpretation of taxing statutes, aligning with the Tribunal's decision.
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