TaxTMI 
TaxTMI 
2025 (6) TMI 376
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....on has been filed on behalf of the Petitioner-M/s Avik Televentures Pvt. Ltd. under Article 226 of the Constitution of India inter alia assailing the Order-in-Original (hereinafter, the 'impugned order') dated 26th June, 2023 passed by the Office of the Assistant Commissioner of Customs. 4. Vide the impugned order, the Petitioner has been denied drawback in respect of phones which were unlocked, after they were manufactured. 5. The short case of the Petitioner is that they are entitled to duty drawbacks when exporting mobile phones, which have been unlocked and accordingly they had availed of the drawbacks. 6. The question that arises in this case, is whether unlocking of mobile phones would result in withdrawal of duty drawback benefits....
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....features or capabilities of the phone are being utilised during the process of unlocking. The unlocking/activation of the mobile phone enables the same to be used in a particular geographical territory, in this case territories outside India, and nothing more. If the mobile phone is not unlocked/activated and it is used in a different territory than the country where it was unlocked/activated, the consumer would not find it possible to use the said phone properly in the jurisdiction. Calls made by the customer would then become chargeable as international calls. Moreover, none of the apps can be used based on the territory where the customer is located. Such issues would make the product totally ineffective, expensive and nonfunctional. ....
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....n of this Court be mere Configuration of the phone for the concerned territory and nothing more. 76. The prevalence of multiple networks, multiple service providers across the world has also to be viewed in the context of standardisation of mobile phone technologies where a phone manufactured in one country can be used in another country seamlessly. Considering the thousands of uses that a mobile phone can be put to, mere unlocking cannot constitute use by the Petitioners. The development of standards in the field of telecommunication which enables usage of mobile phones across countries may be rendered ineffective if such configuration is held to the detriment of the OEM or the traders/exporters. With the growth of mobile phone manufact....
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....le 3 of the Duty Drawback Rules. The Clarifications go beyond Section 75 of the Act and the Duty Drawback Rules since the interpretation sought to be given by CBIC is that unlocking/activation of mobile phones constitutes "taken into use". The said interpretation which is contained in the Clarifications is not sustainable. Accordingly, the Clarifications issued by the CBIC are quashed. 80. The respective impugned SCNs and the Orders-in-Original passed by the Respondents, relying on the Clarifications, which take a contrary position to the findings of this Court, are also quashed. 81. The Court has, however, not examined each of the cases as to whether duty drawbacks are liable to be granted or not to the Petitioner therein. The indivi....
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....more, this Court has observed that with the expansion of mobile phone manufacturing and assembly in India, the volume of exports is expected to increase. The mere fact that the said products are configured for use in foreign jurisdictions 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. 13. Considering the view taken by this Court in AIMS Retail Services Private Limited (supra), even in the present case, the impugned Order-in-Order dated 11th February 2025 is set aside." 8. In both these decisions, the Cour....