Aashi Creations Vs Principal Commissioner of Customs (Madras High Court)
The Madras High Court, in the case of Aashi Creations Vs. Principal Commissioner of Customs, allowed the petitioner, an importer of textile fabric, to re-export a seized consignment back to the supplier, even though adjudication proceedings for alleged misclassification and undervaluation were pending. The court ruled that the physical retention of the goods was unnecessary for the completion of the adjudication process, provided the petitioner furnished adequate financial security.
Madras High Court Permits Re-Export of Seized Goods Pending Customs Adjudication
The petitioner, Aashi Creations, imported textile fabric coated with plastics from China. The consignment arrived at the Chennai Port and was warehoused in a Special Economic Zone (SEZ). The declared value of the goods was USD 9,043.
The Directorate of Revenue Intelligence (DRI) detained the goods, initially alleging misclassification of the goods under an incorrect Customs Tariff Heading (CTH) (declared as CTH 59039090 instead of the correct CTH 59031090) and subsequent undervaluation. Following a test report from the Central Revenues Control Laboratory (CRCL), the goods were formally seized under Section 110 of the Customs Act, 1962, on April 2, 2025.
The petitioner sought provisional release or, alternatively, permission to re-export the goods to the Chinese supplier, who had agreed to take them back. The petitioner argued that the quality and market value of the goods would diminish over time, causing undue loss while the goods were detained pending adjudication. The Revenue, however, argued that the petitioner must await the adjudication proceedings before any decision on re-export could be taken.
