{"id":8623,"date":"2026-04-08T16:52:15","date_gmt":"2026-04-08T11:22:15","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=8623"},"modified":"2026-04-08T16:52:15","modified_gmt":"2026-04-08T11:22:15","slug":"phone-unlocking-before-export-not-use-duty-drawback-allowed-sc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/phone-unlocking-before-export-not-use-duty-drawback-allowed-sc","title":{"rendered":"Phone Unlocking Before Export Not Use \u2013 Duty Drawback Allowed | SC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/customs\/101010000000417499\/pre-export-phone-unlocking-amounts-merely-to-configuration-not-its-use-drawback-benefit-cannot-be-denied-sc\">Union of India vs. Aims Retail Services Pvt. Ltd. (2026) 40 Centax 240 (S.C.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>J.B. Pardiwala<\/strong> &amp; <strong>R. Mahadevan<\/strong>, JJ.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>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\u2019s location. The department, however, took the view that such processes amounted to the goods being \u2018taken into use\u2019 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.<\/p>\n<h2><em>Supreme Court Held<\/em><\/h2>\n<p>The Hon\u2019ble 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 \u2018taken into use\u2019 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.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Union of India vs. Aims Retail Services Pvt. Ltd. (2026)&hellip;<\/p>\n","protected":false},"author":19,"featured_media":8633,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,177,47],"tags":[],"class_list":["post-8623","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-customs","category-customs-news","category-custom-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Phone Unlocking Before Export Not Use \u2013 Duty Drawback Allowed | SC<\/title>\n<meta name=\"description\" content=\"SC rules phone unlocking before export is not \u2018use\u2019; exporters eligible for duty drawback under Drawback Rules, 2017.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.centaxonline.com\/blog\/phone-unlocking-before-export-not-use-duty-drawback-allowed-sc\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Phone Unlocking Before Export Not Use \u2013 Duty Drawback Allowed | SC\" \/>\n<meta property=\"og:description\" content=\"SC rules phone unlocking before export is not \u2018use\u2019; 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