2024 (2) TMI 1540 - HC - Customs

Recovery of duty drawback - export of unlocked mobile phones by Merchant Exporters - process of unlocking a mobile phone amount to the phone being taken into use or not - HELD THAT - Issue notice. List on 20.02.2024 alongwith W.P.(C) 9461/2023.

Summary

In the case before the Delhi High Court, the petitioner challenges a Show Cause Notice dated 30.08.2023, which demands the recovery of a duty drawback amounting to Rs. 31,63,833/- under Section 75 of the Customs Act, 1962, and Rule 17 of the Customs and Central Excise Duties Drawback Rules, 2017. The notice is based on a clarification issued on 25.09.2020, which states that exporting "unlocked" mobile phones by Merchant Exporters constitutes them as "taken into use," thus disqualifying them from duty drawback.The petitioner argues that this clarification is "ex facie illegal," asserting that unlocking a mobile phone does not equate to it being used, and maintains that the phones are exported as new, not used or pre-owned. The court has issued notice, with Mr. Harpreet Singh, Senior Standing Counsel, accepting on behalf of the respondents and seeking time to respond. Replies are to be filed within two weeks, with a rejoinder due before the next hearing on 20.02.2024. The court has allowed the adjudication of the Show Cause Notice to proceed but instructed that it be adjudicated "uninfluenced by the impugned clarification."