TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 129
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....nder Article 226 of the Constitution of India, inter alia assailing the Show Cause Notice dated 16th June, 2023 issued by the Office of the Commissioner of Customs, Air Cargo Exports, New Customs House, New Delhi (hereinafter, the 'Commissioner of Customs') as also the clarifications dated 25th September, 2020 and 14th December, 2021 (hereinafter, the 'clarifications') issued by the Department of Revenue. 3. The second petition being, W.P.(C) 7289/2025 is filed on behalf the Petitioner-M/s Bora Mobility LLP under Article 226 of the Constitution of India inter alia assailing the Show Cause Notice dated 19th June, 2023 issued by the Commissioner of Customs as also the clarifications issued by the Department of Revenue. 4. The short case of ....
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....sible and more useful considering the purpose for which it has been manufactured i.e., facilitation of communication and optimum utilization of all the features of a mobile phone. 73. Further, in the present case, it is seen that apart from switching on, insertion of sim card and making a call for 5 minutes, no other feature of the mobile phone is utilised for the purpose of unlocking/activating the said mobile phone. In addition, it is noted that in cases of 'air-activation' the aforesaid steps are also eliminated and the entire process is conducted without even unboxing or unsealing of the mobile phones. A mobile phone is capable of multifarious uses and applications. None of the said features or capabilities of the phone are being uti....
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....llected and if the mobile phone is locked to a particular region or network then the customer would have to find alternatives to operate the said mobile phone or purchase proper plans to use the phone in a foreign territory. However, if the product is to be exported to a foreign country and enabled for usage in the local network through service providers in the said country and the phone has been not been unlocked/activated in the country of its manufacturing, then the same may prove to be an expensive proposition for the consumer in the said foreign country. Thus, before exporting a product, unlocking/activating the phone to enable it to be used in the destination country would in the opinion of this Court be mere Configuration of the phon....
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....n passed in respective cases have been challenged. 78. The Petitioners had sought clarifications from the CBIC qua the eligibility of duty drawbacks on export of unlocked/activated mobile phones. In response, the CBIC had issued the two clarifications dated 25th September, 2020 and 14th December, 2021. These two clarifications in effect took away the benefit available to the Petitioners under Section 75 read with the Duty Drawback Rules. 79. In the opinion of this Court, the unlocking/activating of the mobile phones as per the procedures adopted by the Petitioners herein is mere 'Configuration' of the product to make it usable and does not constitute "taken into use" under proviso to Rule 3 of the Duty Drawback Rules. The Clarificatio....
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....cks. 84. These petitions are allowed in above terms. All pending applications, if any, are also disposed of." 7. Mr. Aditya Singla, ld. Counsel for the Revenue Department submits that the said judgment is being challenged by the Department by way of a Special Leave Petition. 8. This Court in M/s IConnect India v. Union of India and Others (2025:DHC:1939-DB) while deciding on similar facts, observed as under: "11. As per the above judgement, this Court has held that duty drawback may be claimed in respect of unlocked mobile phones being exported, as the mere act of unlocking does not constitute the phones being "taken into use" within the meaning of the applicable provisions. Given that a mobile phone is capable of being utilized in ....
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....urisdictions cannot operate as a ground to deprive the Petitioners of their rightful claim to duty drawback under the prevailing legal framework. The present case also pertains to the Respondents' rejection of the Petitioner's request for duty drawback on unlocked mobile phones being exported. 11. Considering the view taken by this Court in AIMS Retail Services Private Limited (supra) as also in the case, M/s IConnect India v. Union of India and Ors. (supra), the impugned Show Cause Notices dated 16th June, 2023 and 19th June, 2023 are set aside. 12. Accordingly, the Petitioners' case for drawbacks, shall be processed by the Customs Department in accordance with law. 13. It is made clear that if the drawbacks are processed and granted to....