Drawback eligibility on unlocked mobile Phone

The Customs, Excise and Service Tax Appellate Tribunal delivered a significant ruling holding that unlocking, activation, testing, language configuration, and software flashing of mobile phones prior to export do not amount to the goods being “taken into use” for purposes of the Customs and Central Excise Duties Drawback Rules, 2017. 

The Tribunal consequently set aside confiscation of exported mobile phones, denial of drawback benefits, redemption fine, and penalties imposed upon SOL Mobiles Private Limited and its Vice-President. 

The Tribunal relied extensively upon the Delhi High Court judgment in AIMS Retail Services Pvt. Ltd. and noted that the Supreme Court had dismissed the Revenue’s challenge as well as subsequent review petitions, thereby conclusively settling the legal position in favour of exporters.