ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 14.11.2025
Oppo Mobiles Wins Customs Duty Exemption Case on PCBA Components
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, delivered its final verdict on the case of M/s Oppo Mobiles India Pvt. β Ltd. vs. β Principal Commissioner of Customs (Import) on November 13, 2025. This case revolved around the denial of customs duty exemption for the import of microphones and receivers used in the manufacture of Printed Circuit Board Assemblies (PCBA) for cellular mobile phones. β
Background of the Case
M/s Oppo Mobiles India Pvt. β Ltd., a leading manufacturer of cellular mobile phones, filed an appeal against the order dated June 15, 2020, passed by the Principal Commissioner of Customs, ACC (Imports), New Delhi. β The order rejected Oppoβs claim for exemption from customs duty on microphones and receivers imported for PCBA manufacturing and imposed a demand for differential duty, interest, and penalties for the period between February 2, 2018, and July 6, 2019.
The appellant argued that microphones and receivers are integral parts of PCBA, which is used in the manufacturing of mobile phones. β They claimed exemption under Serial No. β 6 of Notification No. β 57/2017-Customs, dated June 30, 2017, and its subsequent amendments. β However, the department contended that microphones and receivers were excluded from the exemption under the amendment notifications issued on February 2, 2018, and April 2, 2018, and that the amendment notification dated July 6, 2019, was retrospective in nature.
Key Issues in the Case
The primary dispute revolved around whether microphones and receivers imported for PCBA manufacturing were eligible for customs duty exemption under the relevant notifications during the period from February 2, 2018, to July 6, 2019. β The department argued that these items were excluded from the exemption, while Oppo maintained that the amendments did not alter the original exemption for microphones and receivers used in PCBA manufacturing. β
Tribunalβs Observations and Ruling β
After a detailed examination of the case, the Tribunal made the following key observations:
- Amendment Notifications Did Not Alter Serial No. β 6: The Tribunal noted that the amendment notifications dated February 2, 2018, and April 2, 2018, did not modify Serial No. β 6 of the original Notification No. β 57/2017-Customs. Microphones and receivers imported for PCBA manufacturing were still eligible for exemption under this entry. β
- Retrospective Application of July 6, 2019 Notification: The Tribunal rejected the departmentβs claim that the amendment notification dated July 6, 2019, was retrospective. β It emphasized that Section 25(4) of the Customs Act clearly states that notifications issued under Section 25(1) are prospective unless explicitly stated otherwise. β The Tribunal also referred to the Tax Research Unitβs communication dated July 5, 2019, which confirmed the prospective nature of the notification. β
- Expert Opinion and Evidence: The Tribunal criticized the Principal Commissioner for relying on personal knowledge and information from the internet to conclude that microphones and receivers were not part of PCBA. β It highlighted the importance of expert opinions and authentic evidence, such as the Chartered Engineerβs certificate submitted by Oppo, which confirmed that microphones and receivers are integral components of PCBA. β
- Precedents: The Tribunal referred to previous rulings, including Vivo Mobile India Pvt. β Ltd. vs. Commissioner, Customs, New Delhi and InterGlobe Aviation Limited vs. Commissioner of Customs, New Delhi, to support its decision. β These cases emphasized the prospective nature of notifications and the importance of expert evidence in determining the classification of goods.
Final Verdict
The Tribunal concluded that the amendment notifications dated February 2, 2018, and April 2, 2018, did not affect the exemption for microphones and receivers used in PCBA manufacturing. β It also held that the July 6, 2019 notification was prospective and could not be applied to the disputed period. β Consequently, the Tribunal set aside the Principal Commissionerβs order, including the demand for differential customs duty, interest, and penalties, and allowed Oppoβs appeal. β
Key Takeaways
This landmark judgment underscores several critical aspects of customs law:
- Importance of Notification Language: The Tribunal emphasized that the language of a notification determines its applicability. Unless explicitly stated, notifications under Section 25(1) of the Customs Act are prospective. β
- Role of Expert Evidence: The ruling highlighted the significance of relying on expert opinions and authentic evidence rather than personal knowledge or unverified information. β
- Impact on the Mobile Manufacturing Industry: The decision is expected to have a positive impact on mobile manufacturers, as it clarifies the scope of customs duty exemptions for components used in PCBA manufacturing.
This case serves as a reminder of the importance of precise interpretation of notifications and the need for robust evidence in customs disputes. It also reinforces the principle that amendments to notifications cannot be applied retrospectively unless explicitly stated. β
Source: CESTAT Delhi
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