Shreeji Agri Commodity Pvt Ltd Vs Assistant Commissioner of Customs (CESTAT Ahmedabad)
The appeal before the CESTAT, Ahmedabad challenged the conditions imposed for provisional release of seized goods under Section 110A of the Customs Act, 1962. The appellant, engaged in trading, processing, and retail of agri-commodities, had imported coriander seeds under duty exemption Notification No. 21/2023-Cus dated 01.04.2023 against Advance Authorisations issued between February 2024 and February 2025. The department alleged that the appellant diverted the imported coriander seeds into the domestic market without processing, in violation of the actual user condition, stored the goods in warehouses in the names of other parties, and fulfilled export obligations using domestically procured coriander instead of imported inputs. On these allegations, the department seized the goods on 18.06.2025.
Upon the appellant’s request, the department granted provisional release on 10.12.2025, subject to execution of a bond equal to the value of the goods (Rs. 9.11 crore) and furnishing a bank guarantee of Rs. 6.31 crore, in terms of Circular No. 35/2017-Customs dated 16.08.2017. The appellant challenged these conditions as excessive and disproportionate.
The appellant contended that the imported coriander seeds were always processed through cleaning and sorting at its factory and were never sold as such in the domestic market. The processed goods were either exported or transferred to third-party exporters, and temporary storage in warehouses under other names did not amount to violation of the actual user condition. It was further argued that the notification did not mandate that export obligations be fulfilled only from imported duty-free inputs, and that use of indigenous materials was permissible. Reliance was placed on judicial precedents interpreting the term “for use” as “intended to be used,” and on decisions holding that imported inputs need not be physically incorporated into exported products.
