Case Details: Union of India vs. Aims Retail Services Pvt. Ltd. (2026) 40 Centax 240 (S.C.)
Judiciary and Counsel Details
- J.B. Pardiwala & R. Mahadevan, JJ.
Facts of the Case
The exporter was engaged in the export of mobile phones and had procured devices from original equipment manufacturers in a regionally locked condition, restricting their use to specific geographical locations. Prior to export, the exporter undertook processes such as switching on the devices, inserting SIM cards of the destination region, making a call for a limited duration, or activating the phones through over-the-air methods without unboxing, in order to enable their usability in the importing country. It was contended that without such unlocking or activation, the devices could not be effectively used in a different territory, as calls would be treated as international and applications would not function based on the customer’s location. The department, however, took the view that such processes amounted to the goods being ‘taken into use’ in terms of clause (i) of the second proviso to Rule 3 of the Customs and Central Excise Duties Drawback Rules, 2017, thereby disentitling the petitioner from claiming duty drawback. The Supreme Court, in its earlier order, rejected such a contention of the department. The department filed a review petition on such an order. The matter was again accordingly placed before the Supreme Court.
Supreme Court Held
The Hon’ble Supreme Court held that no case for review was made out upon consideration of the earlier order and the record. It observed that in the original decision, unlocking or activating mobile phones prior to export through insertion of a SIM card or over-the-air activation was merely a configuration to make the phones more usable and did not constitute ‘taken into use’ under clause (i) of the second proviso to Rule 3 of the Customs and Central Excise Duties Drawback Rules, 2017. Accordingly, the review petitions were dismissed.
