Madras High Court
M/S.Prakash International vs The Intelligence Officer (Ci) on 12 November, 2025
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
W.P.No.42619 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 12.11.2025
CORAM
THE HONOURABLE Mr.JUSTICE N.ANAND VENKATESH
W.P.No.42619 of 2025
AND
W.M.P.No.47668 of 2025
M/s.Prakash International
Rep. by its Proprietor Prakash Doulat Kumar
701, Vaibhav, 13 Union Park
Khar (West), Mumbai 400 052 ... Petitioner
Vs.
1.The Intelligence Officer (CI)
Directorate of Revenue Intelligence
7th Floor, Drum Shaped Building
I.P.Bhawan, I.P. Estate
New Delhi 110 002
2.The Principal Commissioner of Customs (Chennai-III) (Preventive)
Custom House, No.60, Rajaji Salai
Chennai - 600 001
3.The Additional Commissioner of Customs
O/o.The Principal Commissioner of Customs
Preventive Commissionerate
Custom House, No.60, Rajaji Salai
Chennai – 600 001 ... Respondents
Writ Petition filed under Article 226 of the Constitution of India praying
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W.P.No.42619 of 2025
for issuance of Writ of Certiorarified Mandamus, calling for the records in
F.No.DRI/HQ-CI/B CELL/50D/ENQ-1/2025/1272 dated 05.05.2025 passed by the
1st respondent herein in petitioner's Bill of Entry No.7808770 dated 16.01.2025 and
quash the same as illegal, arbitrary, unfair, un-reasonable, violation of principles of
natural justice and perverse insofar as ordering provisional release in adhering to
the provisions provided under Section 110A of the Customs Act read with the
guidelines issued under Board Circular No.35/2017-Customs, dated 16.08.2017
which has been held as void and unenforceable at law by Hon'ble Division Bench
of Delhi High Court and direct the 2nd respondent herein to release the goods viz.,
267123 SQM of polyester fusible interlining fabrics imported vide Bill of Entry
No.7808770 dated 16.01.2025 totally valued at USD 13,356.15 on execution of
simple bond towards the adjudication levies if any.
For Petitioner : Mr.A.K.Jayaraj
For R1 : Mr.M.Santhanaraman
Senior Standing Counsel
For RR2 & 3 : Mr.T.Nalinidhar
Central Government Standing Counsel
ORDER
This writ petition has been filed challenging the provisional release order
dated 05.05.2025 passed by the 1st respondent and for a consequential direction to
the 2nd respondent 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
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towards the adjudication levies, if any.
2. Heard Mr.A.K.Jayaraj, learned counsel for the petitioner;
Mr.M.Santhanaraman, learned Senior Standing Counsel for the 1st respondent and
Mr.T.Nalinidhar, learned Central Government Standing Counsel for the
respondents 2 and 3.
3. The petitioner had placed order with a supplier in China for supply of
polyester fusible interlining fabrics and one of the consignments reached the
Chennai Port and the same was also taken to the SEZ Ware House in
Nandiambakkam, Chennai. The petitioner had imported 267123 SQM of polyester
fusible interlining fabrics from China, valued at USD 13,356.15. The goods were
shipped under invoice dated 26.12.2024 and the Bill of Entry was filed dated
16.01.2025 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
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imported similar goods and got necessary clearance from the office of the second
respondent and on that pretext, she requested for release of the goods. Thereafter,
the 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 26.03.2025, from the 2nd 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 provisional release order
dated 05.05.2025, issued by the 1st respondent, has approached this Court.
8. The petitioner would further submit that the subject goods were freely
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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 and that this circular
already 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 (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 2nd respondent to impose onerous conditions as a
condition precedent for the release of the goods and accordingly contended that the
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provisional release order is liable to be interfered by this Court.
11. Per contra, the learned 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 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 and therefore, the petitioner has to necessarily
execute the Bank Guarantee as was directed in the provisional release order dated
05.05.2025. 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
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side and the materials available on record.
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.
(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
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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:
(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 polyester fusible
interlining 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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16. In the impugned order, the 2nd respondent has stated as follows:
“Whereas, the goods declared as "POLYESTER FUSIBLE
INTERLINING FABRICS" imported by M/s.Malj Lines Private Limited on
behalf of M/s.Prakash International (IEC-303081368), 701, Vaibhav Road No.4,
13, Union Park Khar (W) Mumbai Maharashtra 400 052 vide the Bill of Entry
filed at M/s.NDR Infrastructure Private Limited, Nandiambakkam, Ponneri Taluk,
Chennai 600 120. The details of Bill of Entry examined by the Officer of the
Directorate of Revenue Intelligence (Headquarters) on 28.01.2025 under
panchnama proceedings are mentioned in the table below :
S. BE No. BE Dt. Details of the imported goods Analysis
No
Qty. of Qty. Unit Assessable CTH CTH Qty. of Qty. Ascertained Redetermined
goods (in (in price value ascertained goods (in (in kg) unit price value of goods
rolls/ SQM) (in (in INR) on the basis Pcs) (in USD/ (in INR)
bales) USD) of the Test kg)
per Report
SQM
1 7808770 16/1/25 870 267123 0.05 Rs. 59039090 60063200 610 18513.5 3.5 5611441.85
1156642.59
60063400 260 5564 3.6 1734632.64
TOTAL Rs. Rs.7346074.49
1156642.59
Whereas the said goods covered under above mentioned Bes were
detained vide Detention Memo dated 28.01.2025 and the said goods were handed
over to the Sh.V.Iyappan, Incharge/Senior Executive, FTWZ Unit M/s.Malj Lines
Private Limited, vide Supardaginama dated 28.01.2025.
Whereas during examination of the said consignments, the importer
has imported the goods to the tune of Rs.1156642.59. However, the CTH of the
imported goods was ascertained, as above in the table, on the basis of the CRCL
Test Report and the same was found to be mis-classified.
The CTH was ascertained on the basis of the test reports received and
further, valuation of the imported goods was ascertained and the re-determined
value of the goods comes to be Rs.7346074.49 (as mentioned in the table above).
Thus, the goods were found to be mis-classified and grossly under-valued and
thus, are imported in contravention to the provisions of Customs Act, 1962.
Now, therefore, the said goods imported vide above Bills of Entry, are
found to be imported under contravention to the provisions of Customs Act, 1962,
hence, these detained goods are hereby placed under seizure under the provisions
of Section 110 of the Customs Act, 1962 on the reasonable belief that the said
goods are liable for confiscation under the provisions of Section 111 of the Act,
ibid for the reasons mentioned above.”
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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 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 redetermined
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.
19. Subject to the compliance of the above conditions, goods shall be
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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.
In the result, the writ petition is disposed of in the above terms. No costs.
Consequently, connected W.M.P. is closed.
12.11.2025
(2/2)
gya
Index : Yes / No
Neutral Citation : Yes / No
N.ANAND VENKATESH, J.
gya
To
1.The Intelligence Officer (CI)
Directorate of Revenue Intelligence
7th Floor, Drum Shaped Building
I.P.Bhawan, I.P. Estate
New Delhi 110 002
2.The Principal Commissioner of Customs (Chennai-III) (Preventive)
Custom House, No.60, Rajaji Salai
Chennai - 600 001
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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12.11.2025
(2/2)
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