Aims Retail Services Private Limited Vs Union of India & Ors. (Delhi High Court)
Delhi High Court held that the unlocking/activation of the mobile phone merely makes the mobile phone more usable in the destination country and the same would therefore not constitute “taken into use” under proviso to Rule 3 of Duty Drawback Rules. Accordingly, duty drawback eligible on the same.
Facts- The present petitions have been filed under Article 226 of the Constitution of India raising a common issue whether the act of unlocking mobile phones after they are manufactured would disentitle the Petitioners from claiming duty drawback on export of the said mobile phones under Section 75 of the Customs Act, 1962 read with Customs and Central Excise Duties Drawback Rules, 2017?
Conclusion- 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 manufacturing/ assembling in India more and more exports would take place and the mere fact that the said products are configured for use in foreign countries cannot deprive the Petitioners from duty drawbacks under the prevalent law discussed hereinabove. Drawbacks are benefits which are given to exporters and in the case of any ambiguity such benefits should go in favour of the exporters and not the other way round. The unlocking/activation of the mobile phone merely makes the mobile phone more usable in the destination country and the same would therefore not constitute “taken into use” under proviso to Rule 3 of Duty Drawback Rules.
