The Central Board of Indirect Taxes & Customs (CBIC), vide Instruction No. 02/2026-Customs dated March 19, 2026, has directed all field formations to strictly comply with judicial pronouncements relating to duty drawback claims on the export of unlocked mobile handsets by merchant exporters.
The instruction draws attention to the Order dated December 13, 2023, passed by the Delhi High Court in Writ Petition (Civil) No. 9461/2023, wherein the issue of admissibility of duty drawback on such exports was adjudicated. The Hon’ble Supreme Court subsequently upheld the High Court’s decision vide its order dated July 18, 2025, in Special Leave Petition (Diary) No. 30758/2025. Further, the review petition filed in the matter was also dismissed by the Apex Court on January 29, 2025, in Review Petition (Civil) Diary No. 69677/2025.
The case pertains to the eligibility of merchant exporters to claim duty drawback benefits on the export of unlocked mobile handsets. The courts, while examining the relevant provisions of the Customs Act and Drawback Rules, have effectively settled the legal position by denying such benefits in the specific circumstances of the case. The rulings underscore that drawback claims must strictly conform to the statutory framework and cannot be extended where the conditions for eligibility are not fulfilled.
In light of the above judicial clarity, CBIC has instructed that all Principal Chief Commissioners/Chief Commissioners and field formations under its jurisdiction must ensure scrupulous compliance with the said orders. Any deviation from the settled legal position may lead to administrative and legal consequences.
This instruction is aimed at ensuring uniformity in implementation, avoiding litigation, and maintaining consistency in the application of drawback provisions across the country.
The Instructions can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1000571/ENG/Instructions
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