Mitraj Business Private Limited Vs Union of India (Delhi High Court)
In a recent ruling, the Delhi High Court intervened on behalf of Mitraj Business Private Limited, a startup and recognized Micro, Small, and Medium Enterprise (MSME), to address the significant and disproportionate costs it incurred due to an “inexplicable” delay by the Customs Department. The court, while acknowledging the department’s right to investigate misdeclarations, expressed concern over the long periods for which imported goods are held, leading to exorbitant demurrage charges that can threaten the survival of small businesses. The court has not only ordered the immediate release of the goods but also directed the Central Board of Indirect Taxes and Customs (CBIC) to review its policies and consider providing preferential treatment to startups and MSMEs.
The dispute originated from the import of packaging materials for baby care products by Mitraj Business Private Limited. The consignment, which arrived at Mundra Port and was destined for ICD Tughlakabad, was flagged for inspection by Customs officials. A physical examination revealed a discrepancy: while the company had declared 80,240 pieces, the officials found 1,01,100 pieces, an excess of 20,860. Additionally, there was a weight discrepancy, with the actual weight being 162.3 kg more than the declared weight. In response, the Customs Department proceeded to pass an Order-in-Original, valuing the “offending goods” at ₹62,983 and determining a differential duty of ₹24,249. The order also imposed a redemption fine of ₹10,000 and a penalty of ₹5,000, with an option for the importer to redeem the confiscated goods upon payment.
