New Delhi, Nov 12: In a judgement that could cheer the IT companies as well as the end-users, the Supreme Court has held that the government cannot levy additional seven per cent customs duty on notebook PCs (laptops) as in the case of desktop computers since the two are totally different.
While dismissing a petition filed by Commissioner of Customs, a bench headed by Justice S B Sinha said that the government cannot ask IT companies to pay seven per cent additional customs duty on notebook PCs, unlike desktops, as the two items were totally different though capable of performing same or similar functions.
"We are of the opinion that a laptop or a notebook PC being an integrated item cannot be a set of a CPU with monitor, mouse and key board," the court said.
A desktop is a combination of items -- CPU, monitor, mouse and keyboard -- which when put together are capable of making a computer, the court observed, adding a notebook computer, on the other hand, comes in an integrated and inseparable form and thus cannot be said to be a set of all these parts.
Upholding the Customs, Excise and Services Tax Appellate Tribunal's judgement, the court said the interpretation by the tribunal was in consonance with the Computers (Additional Duty) Rules, 2004.
The tribunal had passed the order on an appeal filed by Bangalore-based Acer India Pvt Ltd challenging levy of additional seven per cent duty on imported laptops.
The authorities had contended that additional levy was imposed just to provide level-playing filed and protect domestic manufacturers.
According to the department, there was not much difference between a laptop PC and a desktop computer for the purposes of classification.
It further submitted that "Entry 8471 of the tariff framed in terms of the Customs Tariff Act encompasses within its fold desktops and laptops. A laptop being a computer which has all the attributes of a desktop is amenable to excise duty."
Opposing the department's plea, Acer stated that laptops were not desktop computers and were known differently in the market.
For the purposes of paying additional duty, a CPU with its accessories in a set does not fall under the description of a laptop or a notebook, the company added.