COMMR. OF CUSTOMS, BANGALORE versus M/S. ACER INDIA PVT. LTD.

Citation: [2007] 11 S.C.R. 558 · Decided: 12-10-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed
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Judgment (excerpt)

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A 
COMMR. OF CUSTOMS, BANGALORE 
v. 
MIS. ACER Il'IDIA PVT. LTD. 
OCTOBER 12, 2007 
B 
[S.B. SINHA AND HARJIT SINGH BEDI, JJ.] 
Computers (Additional Duty) Rules, 2004-r. 2-Levy of 
Additional duty under-On Imported Notebook/Laptop Compute;s-
c Permissibility-Held: Not permissible-Notebook/Laptop Computers 
is an integrated item and not a set of CPU with Monitor, Mouse and 
Key-Board-The Rules being a taxing statute should be construed 
strictly-Customs Tariff Act, i975-Tariff Jtem 8471-Jnterpretation 
of Taxing statutes. 
D 
The question for consideration is whether Notebook Computer 
(Laptop Computers) are "CPU with Monitor, Mouse and Keyboard 
imported together as a set" classified under SI. No. 2 of table in Rule 2 
of the Computers (Additional Duty) Rules, 2004 and in terms whereof 
E would the said goods be subjected to an additional duty of 7%. 
Dismissing the appeal, the Court 
HELD: A laptop or a notebook being an integrated item cannot 
be said to be a set of a CPU with monitor, mouse and key board. The 
F traditional desktops, computers and monitors are known differently in 
commercial parlance. A desktop computer is a combination of a CPU 
--,/ 
with monitor, mouse and key board imported together as a set. What 
is, thus, covered by the above is a set of items brought together and 
capable of being put together to make a computer. A Notebook 
G Computer, on the other hand, comes in an integrated and inseparable 
form. It is, as such, not a combination of CPU, Monitor, mouse and key 
board. A set although in view of the dictionary meaning may mean a 
...._ 
.... 
complete apparatus but it should consist of more than one item, each 
complementing the work of another and retaining their individual identity 
H 
558 
COMMR. OF CUSTOMS, BANGALORE v. MIS. ACER 559 
INDIA PVT. LTD. [SINHA, J.] 
all the time. Whereas a desktop computer comprising of a CPU with all A 
the aforementioned accessories do not lose its individual identities and' 
not only are marketable as separate items but are also used separately,, 
a laptop computer cannot be said to be a set of the said parts. Computers 
(Additional Duty) Rules, 2004 is a taxing statute. It is required to be, 
construed strictly. 
B 
[Paras 11, 20 and 21] [563-G, H; 564-A, B, C; 569-B-C] 
1 
...-
Godrej Soaps Private Limited v. A.K. Bandyopadhyay and Ors., . 
(1981) ELT 555 (Born.) 
ManishMaheshwariv.Asstt. Commissionerofincome TaxandAnr., C 
(2007) 3 SCALE 627; Southern Pet!'"ochemical Industries Co. Ltd. v., 
Electricity Inspector and E. Tl 0. and Ors., (2007) 7 SCALE 392, referred 
to 
CIVIL APPELLATE nJRISDICTION: Civil Appeal No. 2321 of 
2007. 
D 
~ 
From the Final Order No. 1532/06 dated 13.09.2006 passed by 
the Customs Excise and Service Tax Appellate Tribunal, South Zone Bench 
at Bangalore in Appeal No. C/135/2005. 
Mohan Parasaran, ASG., K. Swamy and B. Krishna Prasad for the E 
Appellant. 
M.P. Devanath and Monish Panda for the Respondent. 
The Judgment of the Court was delivered by 
S.B. SINHA, J. I. Revenue is in appeal before us aggrieved by F 
and dissatisfied with a judgment and order dated 13.09.2006 passed by 
the Customs Excise & Service Tax Appellate Tribunal, South Zone Bench , 
at Bangalore in Appeal No. C/135 of2005 dismissing an appeal upon 
an order dated 28.12.2004 by the Commissioner of Customs (Appeals), 
Bangalore. 
G 
A. 
2. The question which falls for our consideration herein is as to 
whether notebook computers (laptop computers) are "CPU with monitor, 
mouse and keyboard imported together as a set" classified under SL No. 
2 of the Table in Rule 2 of the Computers (Additional Duty) Rules, 2004 H 
--
) 
COMMR. OF CUSTOMS, BANGALORE v. MIS. ACER 
561 
INDIA PVT. LTD. [SINHA, J.] 
materials, components and ingredients of the same nature as; or A 
similar to those, used in the production or manufacture of such 
article, it may, by notification in the Official Gazette, direct that such 
imported article shall, in addition, be liable to an additional duty 
representing such portion of the excise duty leviable on such raw 
materials, components and ingredients as, in either case, may be B 
determined by rules made by the Central Government in this behalf. 
...-
( 4) In making any rules for the purposes of sub-section (3 ), the 
Central Government shall have regard to the average quantum of 
the excise duty payable on the raw materials, components or C 
ingredients used in the production or manufacture of such like 
article." 
8. The
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