Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(CESTAT) 4

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
DILIP GUPTA, PRESIDENT, MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
M/s. Oppo Mobiles India Pvt. Ltd. – Appellant
Versus
The Principal Commissioner of Customs (Import) – Respondent
CUSTOMS APPEAL NO. 51026 OF 2020

Advocates:
For the Appellants/Petitioners: Shri H.K. Sharma, D.K. Nayyar
For the Respondents: Shri Mihir Ranjan

The tribunal reinforced that legislative amendments to customs duty exemptions do not apply retroactively unless stated, thus preserving entitlement to exemptions based on previous notifications.

Headnote:(A) Customs Act, 1962 - Sections 25(1), 28(1), 28AA, and 112(b)(ii) - Exemption Notification No. 57/2017-Customs - Appeal against rejection of customs duty exemption for imported microphones and receivers used in manufacturing mobile phones - The court found that microphones and receivers were indeed included under the class of goods exempted for the manufacture of PCBA as per earlier notifications, and that subsequent amendments did not alter their status retroactively - The tribunal affirmed that the impugned order incorrectly conflated microphones and receivers in contradiction to the defined classifications. (Paras 21, 24, 34, and 46)

(B) Exemption Notification - The appellant maintained entitlement to exemptions under Notifications No. 57/2017 and its amendments; discussions focused on interpretation of legislative amendments regarding classification of parts. (Paras 12, 27)

(C) Classification & Retrospective Effect - Court ruled that unless explicitly stated, amendments do not hold retrospective effect, maintaining that Section 25(4) of the Customs Act mandates prospective application of notifications unless specified otherwise. (Paras 33, 34)

Facts of the case:
The appeal was filed by a manufacturer of cellular mobile phones against a Principal Commissioner's order denying customs duty exemption for imported parts. A show cause for short-paid duty of over 2.5 crores was issued based on amendments that the appellant claimed were misapplied.

Findings of Court:
The tribunal ruled the impugned order was unsustainable, emphasizing that previously established definitions for parts remained unchanged and that the retrospective application claimed by the Principal Commissioner was invalid.

Issues: The court examined the entitlement to exemptions under the Customs Act and the implications of successive amendment notifications affecting the classification of essential parts.

Ratio Decidendi: The tribunal clarified that classification decisions are based on the amendments' intent, emphasizing that specific wording in notifications must be outlined clearly to ensure enforcement and that retroactive interpretations are not valid without explicit language to that effect.

Result: Appeal allowed, and the earlier order set aside.

ORDER

NO. 51708/2025

JUSTICE DILIP GUPTA:

M/s. Oppo Mobiles India Pvt. Ltd, the appellant. has filed this appeal to assail the order dated 15.06.2020 passed by the Principal Commissioner of Customs, ACC (Imports), New Delhi, the Principal Commissioner by which the claim of the appellant seeking exemption of duty against the import of microphones and receivers has been rejected and the demand of duty has been confirmed with interest and penalty.

2. The appellant had claimed exemption of duty under a Notification No. 57/2017-Customs dated 30.06.2017, the Exemption Notification dated 30.06.2017 This Notification was first amended by Notification No. 22/2018-Customs dated 02.02.2018, amendment Notification dated 02.02.2018 and then amended by Notification No. 37/2018-Customs dated 02.04.2018, amendment Notification dated 02.04.2018 and Notification No. 24/2019-Cus dated 06.07.2019, amendment Notification dated 06.07.2019

3. The Exemption Notification dated 30.06.2017 provides that the Central Government in exercise of the powers conferred by section 25(1) of the Customs Act, 1962, the Customs Act exempts the goods of the description specified in column (3) of the Table as are specified in the corresponding entry in column (2) of the said Table when imported into India, from so much of the duty of customs as is in excess of the amount calculated at the standard rate as specified in the corresponding entry in column (4) of the said Table subject to any of the conditions mentioned in the corresponding entry in column (5). The relevant portion of the said Exemption Notification dated 30.06.2017 is reproduced below:

GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 57/2017-Customs New Delhi, the 30^th June, 2017 G.S.R. (E). – In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, *****, hereby exempts the goods of the description as specified in column (3) of the Table below, ****** as are specified in the corresponding entry in column (2) of the said table, when imported into India, from so much of the duty of customs leviable thereron under the said First Schedule as is in excess of the amount

7. the Customs Act calculated at the standard rate as specified in the corresponding entry in column (4) of the said Table subject to any of the conditions, as specified in the Annexure to this notification, the condition number of which is mentioned in the corresponding entry in column (5) of the said Table. TABLE S. No. Chapter or Description of goods Standard Condition Heading or rate No. Sub-heading or tariff item (1) (2) (3) (4) (5)

*****	*****	*****	*****	*****
6.		( Any Chapter (a) The following goods for use in manufacture of cellular mobile phones, namely:- (i) Printed Circuit Board Assembly (PCBA) (ii) Camera Module (iii) Connectors (iv) Display Assembly (v) Touch Panel /Cover Glass Assembly (vi) Vibrator Motor/Ringer (b) Inputs or parts for use in manufacture of items mentioned at (a) above c) Inputs or sub-parts for use in manufacture of parts mentioned at (b) above	N N Nil il il	1 1 1

***** ANNEXURE (emphasis supplied)

Condition No.	Conditions
1.	If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017.

4. The aforesaid Exemption Notification dated 30.06.2017 was first amended by Notification dated 02.02.2018. It needs to be noted that Serial No. 6 of the Exemption Notification dated 30.06.2017 was not touched by this amendment Notification dated 02.02.2018, but Serial No. 18 was inserted with an Explanation. The relevant portion of this amendment Notification dated 02.02.2018 is reproduced below:

“GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 22/2018-Customs New Delhi, the 2^nd February, 2018 *****

In the said notification, in the Table,-

(i) against S.No. 1, for the entry in column (4), the entry “15%” shall be substituted;

(ii) S.Nos. 2 and 3 and the

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2025 Supreme(Online)(CESTAT) 4

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNALDILIP GUPTA, PRESIDENT, MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)M/s. Oppo Mobiles India Pvt. Ltd. – AppellantVersusThe Principal Commissioner of Customs (Import) – RespondentCUSTOMS APPEAL NO. 51026 OF 2020

The tribunal reinforced that legislative amendments to customs duty exemptions do not apply retroactively unless stated, thus preserving entitlement to exemptions based on previous notifications.

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
DILIP GUPTA, PRESIDENT, MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
M/s. Oppo Mobiles India Pvt. Ltd. – Appellant
Versus
The Principal Commissioner of Customs (Import) – Respondent
CUSTOMS APPEAL NO. 51026 OF 2020