𝐒 𝐉 𝐄𝐗𝐈𝐌 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 05.03.2025

Delhi High Court sets aside Customs Advance Ruling order against Nokia

The Delhi High Court, in its judgment dated February 21, 2025, ruled in favor of Nokia Solutions and Networks India Pvt. Ltd., setting aside the Customs Authority for Advance Rulings’ (CAAR) decision regarding the classification of Small Form Factor Pluggable (SFP) transceivers under the Customs Tariff Act, 1975.

Key Highlights of the Case:

1. Background:

• Nokia Solutions challenged the CAAR ruling dated September 26, 2024, which classified SFP transceivers as “apparatus/machine” under CTH 8517 6290, attracting a 20% Basic Customs Duty (BCD).
• Nokia argued that SFPs are parts of telecommunication equipment and should be classified under CTH 8517 7990 (previously 8517 7090), which enjoys exemption benefits.

2. Court’s Analysis:

• The Court relied on previous rulings, including:
  • Reliance Jio Infocomm Ltd. vs. Commissioner of Customs (Mumbai) (CESTAT, 2022).
  • IBM India Pvt. Ltd. vs. Commissioner of Customs (Mumbai).
  • In both cases, CESTAT ruled that SFPs should be classified under CTH 8517 7990 as parts and not as independent machines.
• The Supreme Court upheld these CESTAT rulings and dismissed government appeals against them in 2023 and 2025.

3. Key Judgment by the Delhi High Court:

• Reiterated that SFPs are correctly classifiable under CTH 8517 7990.
• Overruled the CAAR ruling, confirming that SFPs are entitled to duty exemptions under Notification 57/2017-Customs.
• Stated that customs authorities cannot take inconsistent stances across different locations (Mumbai, Hyderabad, Chennai, Delhi, etc.).

4. Final Decision:

• The impugned ruling of CAAR was set aside.
• Nokia’s appeal was allowed, granting classification under CTH 8517 7990.
• SFP transceivers will now be eligible for applicable exemptions under Indian Customs Law.

Impact of the Judgment:

• This ruling ensures uniformity in customs classification for SFP transceivers.
• Reduces tax liability for importers dealing in telecom networking components.
• Restricts customs authorities from arbitrarily reclassifying goods to impose higher duties.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: Delhi High Court

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