The Delhi High Court has ruled that, Amazon Kindle is not a dictionary and liable to pay Customs Duty.
The division bench comprising of Justice Sanjiv Khanna and Justice Chander Shekhar observed that, the exemption notification would apply where a device is an electrical machine covered under tariff item No.8543 89/8543 7099, and its primary and basic function should be to translate or perform dictionary function. The primary function of the Kindle device is to enable the user to read e-books. It is an e-book reading device and not a translator, and is not procured or purchased to perform dictionary function.
While setting aside an order of the Authority of Advance Ruling which had held that Kindle was eligible for the exemption, the Court said that, “No one purchases a Kindle device because it is a translator or device ―with a dictionary function. Ebook readers are purchased because a person wants to read e-books which are pre-loaded or can be downloaded from the internet. Dictionary in a Kindle device enables the reader to make use of the dictionary while reading the e-book. E-book reader as such is not a dictionary or translator device. E-book readers would be appropriately classified in ―others‖ as distinct from ―electrical machines with translation and dictionary function”.
Allowing the Petition, the Court also said that, “We are conscious and aware that pronouncements or decisions by the AAR should not be interfered with as the scope of judicial review is narrow and limited. However, in the context of the present case and after referring to the reasoning given by the AAR, we feel that the language of the notification under the heading ‘description of goods‘ i.e. “electrical machines with translation or dictionary functions” has been erroneously rejected, holding that the dictionary and translation function may not be the main feature of the electrical machine”.
“There has been a failure to consider the legal ratio which mandates strict interpretation of exemption notification and also the legal position that the word ‘with‘ is a chameleon which changes colour in the context in which it is used. The word “with” need not have a static and have a universal interpretation and the construction put forward by the Revenue was credible and worthy of acceptance”, the Court also added.
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