Delhi High Court Sets Aside Customs Advance Ruling on SFP Classification and Grants Exemption

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 06.02.2026

Delhi High Court Sets Aside Customs Advance Ruling on SFP Classification and Grants Exemption

​​ ​​  ​  ​ ​​ ​ ​

Case Title: Nokia Solutions and Networks India Private Limited vs. Customs Authority for Advance Rulings, New Delhi & Others

Case Number:
CUSAA 40/2025 & CM APPL. 4834/2025
CUSAA 41/2025 & CM APPL. 4835/2025

Case Summary:

The case involved two appeals filed by Nokia Solutions and Networks India Private Limited under Section 28KA of the Customs Act, challenging the rulings of the Customs Authority for Advance Rulings dated 26th September 2024. The primary issue was the classification of Small Form Factor Pluggable (SFP) modules—whether they should be classified as parts of machinery under Customs Tariff Heading (CTH) 8517 7990 or as apparatus/machines under CTH 8517 6290. The appellant argued that the issue was already settled by previous rulings of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) and the Supreme Court, which classified SFP modules as parts under CTH 8517 7990. The High Court reviewed the previous rulings and held that the impugned rulings were unsustainable, allowing the appeals.

Legal Principles Considered:

1. Principle of Res Judicata:

The court acknowledged that res judicata does not apply to taxation matters but emphasized that the classification of SFP modules had already been settled in previous rulings and accepted by the Department.

2. Consistency in Classification:

The court stressed that differential classification of identical goods at different locations would undermine the purpose of the Customs Tariff Act and lead to unnecessary litigation.

Statutory Provisions Considered:

1. Section 28KA of the Customs Act: Governs appeals against rulings of the Customs Authority for Advance Rulings.
2. Customs Tariff Act, 1975: Specifically, the classification under CTH 8517 7990 and CTH 8517 6290.
3. Customs Notifications: Notification Nos. 24/2005 and 57/2017, which provide exemptions for goods classified under certain headings.

Case Citations Referred with Summary:

1. Commissioner of Customs-Mumbai (Air Cargo Import) vs. Reliance Jio Infocomm Ltd. (CESTAT Order dated 29th July 2022):
   • The CESTAT Mumbai Bench upheld the classification of SFP modules as parts under CTH 8517 7090 (now 8517 7990). It emphasized that the goods were exempted from Basic Customs Duty under relevant notifications and rejected the Department’s attempt to classify them as “Other Machines” under CTH 8517 6290.
   • The Supreme Court dismissed the Department’s appeal against this order on 27th February 2023, confirming the classification.
2. IBM India Private Limited vs. Commissioner of Customs (Import):
   • The CESTAT Mumbai Bench ruled that SFP modules are classifiable under CTH 8517 7090 (now 8517 7990) and eligible for duty exemption under Notification No. 57/2017.
   • The Supreme Court dismissed the Department’s appeal against this order on 6th January 2025.

Order Passed:

The High Court of Delhi set aside the impugned rulings of the Customs Authority for Advance Rulings dated 26th September 2024. It held that SFP modules are classifiable under Entry 8517 7990 and entitled to applicable exemptions. Both appeals were allowed, and all pending applications were disposed of.

Listen to this on our #YouTube Channel

Source: Delhi High Court

Disclaimer

Handy Download:

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com