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The Supreme Court on Tuesday cautioned courts and adjudicating authorities against reliance on free online sources like Wikipedia [HP India Sales Pvt Ltd vs Commissioner of Customs (Import) Nhava Sheva].
A bench of Justices Surya Kant and Vikram Nath also called upon courts to impress upon their counsel to depend on sources that are more authentic and reliable than Wikipedia since the online encyclopedia is a crowd-sourced one with user-generated edits.
The Court made the observation after noting that in the case before it, the Commissioner of Customs (Appeal) and the Mumbai Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had relied on the Wikipedia to support their findings.
“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 user generated 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.”
The Supreme Court, therefore, set aside a CESTAT order that had held that desktop computers weighing under 10 kliograms are to be classified as ‘portable’ and would attract higher customs duty than other computers.
The appellant-companies had moved the top court after the West Zonal Bench of the CESTAT upheld orders of officials below that had effectively meant that their desktops imported could not avail lower customs duty available to heavier processing units.
The counsel for the companies pointed out that the 10 kg bracket was meant for laptops, and not goods that could not function without an external power source.
The aspect of functionality and ease of transporting the goods need also to be considered to determine functionality, it was argued.
Further, it was argued that the World Customs Organisation’s Harmonised System Explanatory notes also do not classify desktop computers as portable, and so a dictionary meaning of the term could not be relied upon.
The counsel even demonstrated the items in Court to buttress her arguments.
The counsel for the respondents argued that since portability is not defined in the concerned statute (Central Excise Act), it should be interpreted on the principle of general parlance.
Relying on the decision in Mathuram Agrawal v State of MP, he added that the intention of the legislature has to be discerned only from the plain meaning of the language used in taxation statutes.
The Court at the outset said the argument about needing an external power source to be functional was not applicable, as the same was not contemplated anywhere.
It was held that the word ‘portable’ should not have been defined by relying on dictionary meaning that can contain all kinds of hues of associated meanings, as has been held in the decision in CCE v Krishna Carbon Paper Co.
The top court explained when a desktop could be considered portable.
“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, 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”.
None of the two criteria applied to desktop computers of the appellants given their dimensions and lack of cases, which means they cannot be easily carried, the bench noted.
“The dimensions of the concerned goods make it illogical and unviable for daily transit,” the Court said.
Portability could, thus, not, be the sole factor to determine portability of a good, the judgment noted, stressing that courts have to be aware of the effect of technological advancements on law.
“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.”
The Court took a brief trip to the past by referring to luggables (heavy personal computers).
“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.”
The appeals were, therefore, allowed, and the respondents were directed to levy duty on the products in question as applicable to general processing units.
The Court clarified that the prevalent self-assessment by the appellants as to the nature of their goods had to be accepted since the burden of proof to deem otherwise was on the customs department, and the latter had failed to do so.
Advocates V Lakshmikumaran, Charanya Lakshmikumaran, Mounica Kasturi, Apeksha Mehta, and Pranav Mundra represented the appellants.
Senior Advocate Arijit Prasad with advocates Rupesh Kumar, Adit Khorana, OP Shukla, Sunita Sharma, Raj Bahadur Yadav and Mukesh Kumar Maroria appeared for the respondents.
