Madras High Court
M/S.Crescent Fashion vs The Principal Commissioner Of Customs ... on 4 November, 2025
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
Writ Petition No.41877 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 04.11.2025
CORAM
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH
W.P. No.41877 of 2025
and
W.M.P.Nos.46922 & 46929 of 2025
M/s.Crescent Fashion,
Rep. By its Proprietor Mr.Ahmed Mustafa,
No.26, Balasamy Iyer Street, Nagal Nagar,
Muslim Madharsha Near Adiyanutu,
Dindigul – 624 003, Tamil Nadu ... Petitioner
Vs.
1.The Principal Commissioner of Customs (Chennai III)
(Preventive),
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
2.The Intelligence Officer (CI),
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhavan, I.P. Estate,
New Delhi – 110 002
3.The Additional Commissioner of Customs,
O/o.The Principal Commissioner of Customs,
Preventive Commissionerate,
Custom House, No.60, Rajaji Salai,
1/ 1609
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Writ Petition No.41877 of 2025
Chennai - 600 001. ... Respondents
PRAYER : Writ Petition filed under Article 226 of the
Constitution of India, praying for issuance of a Writ of
Certiorarified Mandamus, to call for records in F.No. DRI/ CI//
ENQ/ 124/ 2025- CI- O/o. DG- DRI- HQ- DELHI/ 1746 dated
28.05.2025 vide Seizure Memo passed by the 2nd respondent
herein in petitioners Bill of Entry No. 8323465 dated 13.02.2025
and quash the same as illegal arbitrary unfair , un-reasonable
violation of principles of natural justice and perverse in sofar as
intimating for provisional release of the goods in adhering to the
Provisions provided under Section 110A of the Customs Act read
with the guidelines issued through Board Circular No. 35/ 2017-
Customs, dated 16.08.2017 which has been held as void and
unenforceable at law by Honble Division Bench of Delhi High
court and direct the respondents herein to release the goods viz.,
71475 SQ Meter in 795 Rolls of PVC Coated Fabric imported vide
Bill of Entry No. 8323465 dated 13.02.2025 totally valued at USD
8,577.00 for 71475 SQ Meter in 795 Rolls on execution of simple
Bond for the Differential Duty on the Re-determined value and
also on execution of Simple bond towards the Adjudication levies
if any and pass orders.
2/ 1609
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Writ Petition No.41877 of 2025
For Petitioner : Mr.A.K.Jayaraj
For Respondents : Mr.B.Arvind Srevatsa
Junior Standing Counsel
for R1 to R3
ORDER
This writ petition has been filed challenging the Seizure
Memo dated 28.05.2025 passed by the second respondent and for
a consequential direction to the respondents to release the goods
on execution of Simple Bond for the Differential Duty on the re-
determined value and also on execution of Simple Bond towards
the adjudication levies, if any.
2. Heard Mr.A.K.Jayaraj, learned counsel for the
petitioner and Mr.B.Arvind Srevatsa, learned Junior Standing
Counsel for respondents 1 to 3.
3. The petitioner had placed order with a supplier in
China for supply of PVC Coated Fabrics and one of the
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Writ Petition No.41877 of 2025
consignment reached the Chennai Port and the same was also
taken to the SEZ Ware House in Nandiampakkam, Chennai. The
petitioner had imported 71475 SQM., of PVC Coated Fabrics from
China, valued at total USD 8,577.00. The goods were shipped
under invoice dated 31.12.2024 and the Bill of Entry was filed
dated 13.02.2025 and the petitioner claim for clearance of the
goods.
4. The petitioner had submitted all the necessary
documents and also filed the Bill of Entry and sought for the
clearance of the goods by declaring the value of the goods. The
petitioner requested further release of the goods.
5. The petitioner would submit that on an earlier
occasion they had imported similar goods and got necessary
clearance from the office of the second respondent and on that
pretext, he requested for release of the goods. Thereafter, the
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Writ Petition No.41877 of 2025
authorities had de-stuffed the goods and conducted examination
of the goods. Subsequently, the samples were sent for testing.
The authorities had informed the petitioner that the release of the
goods would be subject to the test result of the sample.
6. At this juncture, the petitioner received the impugned
seizure memo dated 28.05.2025 from the second respondent
stating that as per the CRCL Test Report, the goods have to be re-
classified and therefore, the seized goods were liable for
confiscation and were placed under seizure in terms of Section
110(1) of the Customs Act. The impugned seizure memo has also
drawn reference to the provisions of provisional release in terms
of Section 110A of the Customs Act read with guidelines issued
under Board Circular No.35/2017-Customs, dated 16.08.2017 .
7. The petitioner aggrieved by the impugned seizure
memo dated 28.05.2025, issued by the second respondent, has
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Writ Petition No.41877 of 2025
approached this Court.
8. The petitioner would further submit that the subject
goods were freely importable goods and cheaper in price. He also
added that identical goods were already assessed and released by
the Customs Officers, by accepting the value declared in the Bill
of Entry.
9. The learned counsel for the petitioner submitted that
the provisional release order was issued by placing reliance upon
the guidelines issued under CBIC Circular No.35/2017-Customs,
dated 16.08.2017, became a subject matter of challenge before the
Delhi High Court and it was struck down as contrary to Section
110A of the Customs Act and was held to be void and
unenforceable in law. To substantiate this submission, the
learned counsel relied upon the Division Bench judgment of the
Delhi High Court in the case of Additional Director General
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Writ Petition No.41877 of 2025
(Adjudication) Vs. Its My Name Pvt., Ltd., reported in 2021
(375) E.L.T. 545 (Del.). The learned counsel further brought to
the notice of this Court that the Apex Court confirmed the
judgment of the Delhi High Court by dismissing the S.L.P by
order dated 01.10.2020.
10. The learned counsel, therefore, submitted that there
was absolutely no justification on the part of the second
respondent to impose onerous conditions as a condition precedent
for release of the goods and accordingly, contended that the
impugned order drawing reference to provisional release order is
liable to be interfered by this Court.
11. Per contra, the learned Junior Standing Counsel
appearing on behalf of the respondents submitted that the Apex
Court did not go into the validity or otherwise of the judgment of
the Delhi High Court, since the particular case, which went on an
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Writ Petition No.41877 of 2025
appeal before the Hon'ble Supreme Court, the Apex Court merely
took into consideration the submission made by the learned
Senior Counsel appearing on behalf of the assessee reporting no
objection for the enhancement of the quantum of the Bank
Guarantee and accordingly, the Apex Court merely modified the
order of the High Court with respect to the quantum of Bank
Guarantee and disposed of the S.L.P. The learned Standing
Counsel further submitted that the adjudication is yet to take
place and at that point of time, if any additional duty, fine or
penalty is imposed against the petitioner, there must be some
security available with the Department for recovering the same.
Hence, it was contended that there is absolutely no reason for
interfering with the provisional release order.
12. This Court has carefully considered the submissions
made on either side and the materials available on record.
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Writ Petition No.41877 of 2025
13. This Court is not dealing with the merits of the case
since what has been put to challenge is the provisional release
order and that too questioning some of the onerous conditions.
While undertaking this exercise, it will suffice to take note of
some of the earlier orders passed by this Court. One such order
was passed in the case of Green Line Vs. Commissioner of
Customs, Chennai -IV, reported in 2016 (340) E.L.T 140
(Mad). That was also a case, which involved differential duty of
non prohibited goods. Similar conditions were imposed and the
said writ petition was disposed of by this Court in the following
terms:
“8. In the light of the above discussions, the
Writ Petition is disposed of with the following
directions:
(i) The petitioner is directed to remit the entire duty as
assessed by them;
(ii) The petitioner is directed to pay 50% of the
differential duty which has been arrived at by the
Department as Rs. 22.72 lakhs;
(iii) The petitioner is directed to execute a bond for the
remaining amount to the satisfaction of the
respondents.
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Writ Petition No.41877 of 2025
(iv) The petitioner shall execute an indemnity bond
stating that in the event of Shir.S. Ariya raising any
claim over the goods or concerning the use of IEC code
issued in favour of M/s. Green Line, the petitioner Mr.
Mohamed Kalith alone would be fully responsible for
the same and no liability can be fastened on the
respondent Department and the indemnity bond should
be furnished in the form approved by the respondents.”
14. This order of the learned Single Judge was
subsequently confirmed by the Hon'ble Division Bench of this
Court in W.A.No.1243 of 2016 dated 25.10.2016. It is also
relevant to take note of a Division Bench order of this Court in
the case of Commissioner of Customs and Others vs. Sri
Venkateshwara Paper Boards Rep.by its General Manager
Mr. L. Barath reported in 2022 (379) E.L.T 310 (Mad), which
involved prohibited goods and the writ petition was disposed of in
the following terms:
“32. We have perused the order dated
29.12.2020 permitting provisional release of the cargo,
subject to the following conditions:
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(a) execution of a bond for Rs. 34,65,334/-,
(b) production of cash security/bank guarantee for Rs.
12,12,867/- towards redemption fine and penalty, and
(c) payment of duty of Rs. 9,43,411/-.
33. We find nothing unreasonable about
conditions (a) and (c), however condition (b) is
concerned directing the Importer to furnish Bank
guarantee/cash security towards redemption fine and
penalty would be harsh as the show-cause notice is yet
to be adjudicated. Therefore, we modify the condition
(b) alone by directing the Importer to execute the bond
for Rs. 12,12,867/-.
34. On compliance of the execution of the bond
for the amount mentioned in conditions (a) and (b)
supra and payment of duty as mentioned in condition
(c), the Revenue shall permit provisional release of the
cargo within seven (7) days therefrom, which shall be
subject to the result of the adjudication of the show-
cause notice.”
15. In the case in hand, the goods that are involved are
PVC Coated Fabrics, which according to the Department has been
misclassified and undervalued. Therefore, the Department is
proceeding further with the adjudication proceedings. Pending the
same, the impugned order has been passed.
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Writ Petition No.41877 of 2025
16. In the impugned order, the second respondent has
stated as follows:
"Whereas the goods declared as “PVC COATED
FABRICS" imported by M/s. Kani International (IEC:
ESOPK1635P), 19/22, 5th Street B V Nagar, 3rd Main Road,
Chennai – 600 061 vide Bill of Entry No.7310364 dated
18.12.2024 filed through SEZ Unit M/s.Malj Lines Pvt.
Ltd. (IEC : AAMCM1178L) situated inside the FTWZ
M/s.NDR Infrastructure Private Limited,
Nandiambakkam, Ponneri Taluk, Chennai – 600 120,
appears to be appropriately classifiable under CTH
54076900 on the basis of CRCL Test Report, as against the
declared CTH 59039090.
In view of the above, there is a reason to believe
that the goods imported vide the Bill of Entry No.7310364
dated 18.12.2024 are liable for confiscation in terms of
section 111(m) of the Customs Act, 1962. Therefore, the
subject goods are hereby placed under seizure under the
provisions of Section 110(1) ibid.
Further, your attention is drawn to the provisions
of provisional release of the seized goods provided under
section 110A of the Customs Act, 1962 read with the
guidelines issued through Board's Circular No.35/2017 –
Customs, dated 16.08.2017.”
17. Taking into consideration the facts and circumstances
of the case and considering the grounds raised in the writ petition
and also taking into consideration of the earlier orders passed by
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this Court, this Court is inclined to modify the conditions imposed
in the provisional release order as follows:
a) The petitioner is directed to remit the entire
duty as declared by them;
b) The petitioner is directed to pay 50% of the
differential duty for the total value arrived at
by the Department;
c) The petitioner is directed to execute a bond on
re-determined value arrived by the
Department; and
d) The petitioner shall also execute a bond for
value of goods in respect of adjudication
levies, if any. On compliance, the goods shall
be released by the respondent within a period
of seven (7) days from the date of compliance
of the conditions.
18. The above conditions will suffice to take care of the
interest of the Department and at the same time, the petitioner
will also be able to get the goods released in its favour.
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Writ Petition No.41877 of 2025
19. Subject to the compliance of the above conditions,
goods shall be released by the respondents. The Department is
directed to proceed further with the adjudication and the
petitioner shall co-operate during the adjudication proceedings to
ensure that it is completed as expeditiously as possible.
20. In the result, the writ petition is disposed of in the
above terms. No costs. Consequently, connected miscellaneous
petitions are closed.
05.11.2025
NCC: Yes / No
Index : Yes / No
Speaking Order : Yes / No
rka
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Writ Petition No.41877 of 2025
To
1.The Principal Commissioner of Customs (Chennai III)
(Preventive),
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
2.The Intelligence Officer (CI),
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhavan, I.P. Estate,
New Delhi – 110 002
3.The Additional Commissioner of Customs,
O/o.The Principal Commissioner of Customs,
Preventive Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
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Writ Petition No.41877 of 2025
N.ANAND VENKATESH, J.
rka
Writ Petition No.41877 of 2025
04.11.2025
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