Vimpro Tech Vs Commissioner of Customs (Madras High Court)
The Madras High Court allowed the writ petition challenging rejection of the petitioner’s request for provisional release of goods imported under Bill of Entry No. 4355530 dated 07.09.2025. The goods, described as plastic spare parts, were detained by Customs on the ground of misdeclaration. The Department considered them plastic spares for lighters and took the view that they fell under Chapter 96 rather than Chapter 13 of the Customs Tariff Act, attracting Basic Customs Duty of 10% instead of 5%.
The Court considered Section 110A of the Customs Act, 1962, which provides for provisional release of seized goods subject to conditions. It referred to CBIC Circular No.35/2017-Customs dated 16.08.2017 and held, following Additional Director General (Adjudication) v. Its My Name Pvt. Ltd., that executive instructions cannot override the statutory provision for provisional release. The Court also noted that the petitioner produced an official memorandum dated 06.2025 authorising import of goods described as plastic shells and spare parts for manufacturing gas lighters.
The Court held that classification, alleged misdeclaration, applicability of DGFT notifications and differential customs duty were matters for adjudication. Pending investigation, therefore, was not by itself sufficient to deny provisional release. The impugned order dated 17.04.2026 was set aside.
Release was directed subject to payment of duty at 10% after credit for duty already paid, execution of a personal bond for the balance differential duty, and continuation of investigation and adjudication. The Customs authority was also directed to consider the detention certificate request. The exercise was to be completed within two weeks.
Cases Discussed
- Additional Director General (Adjudication) Its My Name Pvt. Ltd. (Delhi High Court), [(2021) 375 E.L.T. 545 (Del.)]
- Navashakti Industries Pvt. Ltd. v. Commissioner of Customs, ICD, TKD, New Delhi (Delhi High Court), [2011 (267) E.L.T. 483 (Del.)]
- Commissioner of Customs, Tuticorin v. Empire Exports (Madras High Court), [2013 (287) E.L.T. 41 (Mad.)]
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner has filed this writ petition challenging the order dated 17.04.2026 passed by the third respondent, rejecting the petitioner’s request for provisional release of the goods imported under Bill of Entry No.4355530 dated 07.09.2025.
2. The petitioner states that he is a manufacturer of various goods and had imported a consignment of plastic spare parts under the said Bill of Entry. The consignment arrived at Chennai Seaport and the Bill of Entry was filed on 07.09.2025. The goods were detained by the Customs authorities on the ground that the petitioner had misdeclared the goods. According to the department, the goods imported were plastic spares for lighters/lighter spare parts. The department further took the view that the goods fall under Chapter 96 of the Customs Tariff Act and not under Chapter 13, and therefore, the petitioner was liable to pay Basic Customs Duty at 10% instead of 5%. The petitioner thereafter filed an application seeking provisional release of the The said application was rejected by the impugned order. Hence, the present writ petition.
3. Heard both sides and perused the materials available on record.
4. The impugned order shows that the petitioner’s request for provisional release was considered with reference to CBIC Circular No.35/2017-Customs dated 16.08.2017. The Circular states that provisional release may not be appropriate in cases involving prohibited or restricted goods, non-compliance with statutory requirements, or where release of the goods may affect the investigation or public interest. Section 110A of the Customs Act, 1962, specifically provides for provisional release of seized goods on such terms and conditions as may be imposed by the competent authority.
5. The Delhi High Court, in Additional Director General (Adjudication) Its My Name Pvt. Ltd., [(2021) 375 E.L.T. 545 (Del.)], considered the validity of the said Circular and held that executive instructions may supplement a statute, but cannot override or replace the statutory provision. Therefore, the Circular cannot take away the right of provisional release provided under Section 110A of the Customs Act. The request for provisional release has to be considered under Section 110A, while ensuring that the interest of the Revenue is protected.
6. In the present case, the petitioner’s request was rejected on the ground that the goods appeared to have been imported in violation of DGFT Notification Nos.15/2023 and 36/2024-25, that there was a misdeclaration and that the investigation was still According to the department, release of the goods at this stage may prejudice the investigation and defeat the enforcement of the import policy.
7. The learned counsel for the petitioner has, however, produced an official memorandum dated 06.2025 issued by the Under Secretary to the Government, authorising the petitioner to import goods described as “Employ Plastic Shell and Spare Parts for manufacturing of Gas Lighter with Plastic Holder Tray”. The said description appears to correspond with the nature of the goods imported by the petitioner.
8. Whether the goods imported by the petitioner are covered by the said authorisation and whether there was any misdeclaration or violation of the import policy are matters to be decided in the adjudication proceedings.
9. The question of classification of the goods and the consequential liability towards differential customs duty can also be decided by the competent authority in accordance with At this stage, the pendency of the investigation cannot, by itself, be a ground to deny provisional release when Section 110A specifically provides for such release.
10. The petitioner has relied upon the decision of the Delhi High Court in Navashakti Industries Pvt. Ltd. v. Commissioner of Customs, ICD, TKD, New Delhi, [2011 (267) E.L.T. 483 (Del.)], wherein provisional release of the goods was directed subject to furnishing security towards the differential duty.
11. The said decision was modified by the Hon’ble Supreme Court in Civil Appeal 3940 of 2011, dated 04.05.2011. The Hon’ble Supreme Court directed release of the goods subject to furnishing a bank guarantee for 30% of the differential duty to the satisfaction of the Commissioner of Customs.
12. The Division Bench of this Court, in Commissioner of Customs, Tuticorin v. Empire Exports, [2013 (287) E.L.T. 41 (Mad.)], following the decision of the Hon’ble Supreme Court, directed provisional release of the goods subject to payment of the duty declared by the importer, payment of 30% of the differential duty and execution of a personal bond for the balance 70% of the differential duty.
13. In the present case, the petitioner has paid duty at 5%, whereas the department has taken the view that the goods are liable to duty at 10%. The question of the actual differential duty payable is yet to be decided in the adjudication proceedings.
14. In view of the above, this Court is of the view that the interest of the revenue can be protected by imposing appropriate conditions for provisional release. There is no need to keep the goods under detention until the completion of the adjudication proceedings.
15. Accordingly, the writ petition is allowed and the impugned order dated 17.04.2026 passed by the third respondent is set aside. The third respondent is directed to release the subject goods provisionally, subject to the following conditions;
i. The petitioner shall pay duty at the rate of 10% on the value of the goods declared in the Bill of Entry, after giving credit for the duty already paid;
ii. The petitioner shall execute a personal bond for the balance amount of differential duty that may be determined in the adjudication proceedings; and
iii. The provisional release shall be without prejudice to the rights of the department to continue the investigation and complete the adjudication in accordance with law.
iv. The third respondent shall also consider the petitioner’s request for issuance of the necessary detention certificate under Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009, on its own merits and in accordance with law.
v. The above exercise shall be completed within a period of two weeks (2) from the date of receipt of a copy of this order.
vi. It is made clear that the observations made in this order are only for deciding the issue of provisional release and shall not affect the adjudication proceedings relating to the classification of the goods, alleged mis-declaration, applicability of the DGFT notifications or the final liability towards customs duty.
vii. Consequently, the connected miscellaneous petitions are There shall be no order as to costs.
