Madras High Court
M/S. Smart Solution vs The Principal Commissioner Of Customs ... on 21 November, 2025
Author: N.Anand Venkatesh
Bench: N. Anand Venkatesh
1/11 WP No. 45420 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21-11-2025
CORAM
THE HONOURABLE MR JUSTICE N. ANAND VENKATESH
WP No. 45420 of 2025
AND
WMP NO. 50614 OF 2025
M/s. Smart Solution
Rep., By its Proprietor Mr.Yasir Khan,
Gali No.2, EKTA Colony,
Gudi Guda Ka Naka,
Gwalior - 474 001, Madhya Pradesh
Petitioner(s)
Vs
1. The Principal Commissioner of Customs (Chennai-III), (Preventive),
Custom House, No.60, Rajaji Salai,
Chennai -600 001.
2.The Additional Director General
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhawan, I.P. Estate,
New Delhi -110 002.
3.The Special Officer, FTWZ
NDR Infrastructure Private Limited,
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2/11 WP No. 45420 of 2025
Nandiambakkam, Ponneri Taluk,
Chennai -600 120.
Respondent(s)
PRAYER Writ Petition filed under Article 226 of the Constitution of India for
issuance of a Writ of Mandamus, directing the Respondents herein to Permit the
petitioner to Re-Export the goods viz., 93288.89 SQM., of PVC Coated Fabrics
imported vide Bill of Entry No.7665277, dated 08.01.2025, and Bill of Lading
No.CSHMF241201878.
For Petitioner(s): Mr.A.K. Jayaraj
For Respondent(s): Mr.B.Sivaraman
Junior Panel Counsel for R1
Mr.H.Siddarth
Standing Counsel for R2
ORDER
This writ petition has been filed seeking issuance of a Writ of Mandamus
directing the respondents herein to permit the petitioner to re-export the goods
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viz., 93288.89 SQM., of PVC Coated Fabrics imported vide Bill of Entry
No.7665277, dated 08.01.2025, and Bill of Lading No.CSHMF241201878, in
terms of various judicial pronouncements rendered by various High Courts.
2. The case of the petitioner is that they imported PVC Coated
Fabrics from China. These goods were shipped from M/s.Shaoxing Kaiyi
Textile Co., Ltd.,, China, through invoice dated 21.12.2024 and filed
warehousing bill of entry dated 08.01.2025 for SEZ import Z-type and claimed
for clearance of the goods.
3. The investigation authorities informed the petitioner that investigation
is being done and later, it was found that the goods declared under CTH
59031090 and the same has been classified under different CTH. Thereafter, the
petitioner was informed that the samples were taken and it has been sent to
CRCL, New Delhi, for testing and thereafter, the goods have been detained. The
goods were seized under seizure memo dated 20.05.2025 stating that all the
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goods were found to be mis-classified on the basis of CRCL test report and it is
further stated that the CTH ascertained that the goods have been misclassified
and different CTH have been ascertained on the basis of the CRCL test report.
4. The petitioner was thereafter issued with summons for appearance
before the investigating officer at New Delhi. The petitioner also attended the
enquiry. The intelligence officer of DRI, informed that since the goods imported
was found to be misclassified, the goods are liable for confiscation under the
provisions of the Customs Act.
5. The grievance of the petitioner is that there is long delay in the
release of the goods and therefore, the petitioner is seeking for re-export of the
goods. However, no decision has been taken till date and it is under these
circumstances, the present writ petition came to be filed before this Court.
6. The issue involved in the present writ petition has already been
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dealt with by this Court in W.P.No.33723 of 2025 dated 26.09.2025 and the
relevant portions are extracted hereunder:
"7. Section 110 of the Act deals with seizure of goods. Section
111 deals with confiscation of improperly imported goods.
8. The learned counsel for the petitioner submitted that in the case
in hand, at best, the goods may fall under Section 111(m) of the Act and
that even in such an event, Section 125 gives an option to pay the fine in
lieu of confiscation, which will be decided after adjudication.
9. The learned counsel for the petitioner placed reliance upon the
judgment of the Hon'ble Apex Court in the case of Siemens Ltd.Vs.
Collector of Customs [reported in 1999 (113) ELT 776].
10. By relying upon the said judgment of the Hon'ble Apex Court,
a learned Single Judge of this Court passed an order in the case of
Sankar Pandi Vs. Union of India [reported in 2002 (141) ELT 635]
wherein it was held that the petitioner therein was entitled to re-export
the articles in question and that it was necessary for him to pay
retention fine as imposed by the Authorities. This Court ultimately held
that at best, penalty could be imposed. This Court also reduced the
penalty and a direction was given to the petitioner therein to pay the
reduced penalty.
11. The learned counsel for the petitioner also brought to the
notice of this Court a Division Bench judgment of the Madurai Bench of
this Court in Assistant Commissioner of Customs (Imports), Tuticorin
Vs. Mahadev Enterprises [reported in 2023 (3) CENTAX 8] wherein
this Court permitted the re-export of goods after executing a bond to
cover the value of the goods pending adjudication.
12. The learned counsel for the petitioner further brought to the
notice of this Court the other views taken by different High Courts
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wherein a bank guarantee can be directed to be executed for some
percentage of the customs duty that may be leviable on the re-
determined value of the goods.
13. In the case in hand, the investigation has already been
completed and based on the CRCL test report, it is alleged that there was
a misclassification of the goods and that the goods were undervalued.
This may result in confiscation under Section 111 of the Act and
ultimately, the Adjudicating Authority can also give an option to the
petitioner to pay the fine in lieu of confiscation.
14. The crux of the issue is as to whether the goods will have to
remain in India or the petitioner can be permitted to re-export the goods
to the supplier at China since the supplier had also agreed to take back
the goods.
15. The logical end to the adjudication proceedings will result in
directing the petitioner to pay the fine/penalty and differential duty. For
this purpose, it is not necessary to retain the goods in India. Therefore, to
strike a balance, considering the fact that the goods are lying in India
from January 2025, certain conditions can be imposed on the petitioner
and on fulfilment of the conditions so imposed, the petitioner can be
permitted to re-export the goods. This view has been taken by this Court
and other High Courts while granting such a relief.
16. In the light of the above discussions, the writ petition is
disposed of in the following terms :
(i) The petitioner shall execute a bond for the total
value of the differential duty payable by them;
(ii) The petitioner shall furnish a bank guarantee
equivalent to 20% of the re-determined value; and
(iii) On the petitioner fulfilling the above two
conditions, they shall be permitted to re-export the goods
within a period of 12 days from the date of compliance of
the above conditions as imposed by this Court.
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No costs. Consequently, the connected WMP is closed."
In view of the above, the writ petition is disposed of in the following
terms :
(i) The petitioner shall execute a bond for the
total value of the differential duty payable by them;
(ii) The petitioner shall furnish a bank
guarantee equivalent to 20% of the re-determined
value; and
(iii) On the petitioner fulfilling the above two
conditions, they shall be permitted to re-export the
goods within a period of twelve (12) days from the
date of compliance of the above conditions as
imposed by this Court.
No costs. Consequently, the connected miscellaneous petition is closed.
21-11-2025
(2/3)
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Index:Yes/No
Speaking/Non-speaking order
Internet:Yes
Neutral Citation:Yes/No
ssr
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To
1. The Principal Commissioner of Customs (Chennai-III), (Preventive),
Custom House, No.60, Rajaji Salai,
Chennai -600 001.
2.The Additional Director General
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhawan, I.P. Estate,
New Delhi -110 002.
3.The Special Officer, FTWZ
NDR Infrastructure Private Limited,
Nandiambakkam, Ponneri Taluk,
Chennai -600 120.
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N.ANAND VENKATESH J.
ssr
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21-11-2025
(2/3)
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