Madras High Court
Shiv Sai Associates vs The Principal Commissioner Of Customs ... on 17 October, 2025
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
W.P.No.39548 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 17.10.2025
CORAM
THE HONOURABLE Mr.JUSTICE N.ANAND VENKATESH
W.P.No.39548 of 2025
AND
W.M.P.No.44422 of 2025
Shiv Sai Associates
Rep. by its Proprietor G.Balaji
No.51/52, Real Towers, 1st Floor
Royapettah High Road, Mylapore
Chennai 600 004 ... Petitioner
Vs.
1.The Principal Commissioner of Customs (Preventive)
Custom House, No.60, Rajaji Salai
Chennai – 600 001
2.The Additional Commissioner of Customs (NDR-FTWZ)
O/o.The Principal Commissioner of Customs
Preventive Commissionerate
Custom House, No.60, Rajaji Salai
Chennai – 600 001 ... Respondents
Petition filed under Article 226 of the Constitution of India
praying for issuance of Writ of Certiorarified Mandamus, calling for the
records in F.No.GEN/ADJ/Misc/338/2025 dated 16.07.2025, passed by the
2nd Respondent herein in petitioner's Bill of Entry No.7815291, dated
1/ 12
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W.P.No.39548 of 2025
16.01.2025 and quash the same as illegal, arbitrary, unfair, un-reasonable,
violation of principles of natural justice and perverse insofar as Condition
No.1 and 3 of the Impugned Order dated 16.07.2025 and direct the
2nd respondent herein to release the goods viz., 58989.63 SQM of PVC
coated fabric imported vide Bill of Entry No.7815291, dated 16.01.2025,
totally valued at USD 3539.38 for 58989.63 SQM, without insisting for
payment of Duty on the re-determined value and without insisting for
furnishing Bank Guarantee for Rs.8,00,000/-.
For Petitioner : Mr.A.K.Jayaraj
For Respondents : Ms.Anu Ganesan
Junior Panel Counsel
ORDER
This writ petition has been filed, challenging the provisional
release order dated 16.07.2025 passed by the 2nd respondent and for a
consequential direction to the 2nd respondent to release the goods without
insisting for payment of duty on the re-determined value and without
insisting furnishing of Bank Guarantee for a sum of Rs.8,00,000/- (Rupees
Eight Lakhs only).
2. Heard Mr.A.K.Jayaraj, learned counsel for the petitioner and
Ms.Anu Ganesan, learned Junior Panel Counsel for the respondents.
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3. The petitioner had placed order with a supplier in China for
supply of PVC coated fabric 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 58989.63 SQM of
PVC coated fabric from China, valued at USD 3539.38. The goods were
shipped under invoice dated 20.12.2024 and the Bill of Entry was filed dated
16.01.2025 and the petitioner claim for clearance of the goods for home
consumption.
4. The petitioner had submitted all the necessary documents and
also filed the Bill of Entry for home consumption and sought for the
clearance of the goods by declaring the value of the goods. The petitioner
requested further release of the goods.
5. An investigation was done and summons was issued to the
petitioner to appear before the Investigating officer at New Delhi and the
petitioner attended the enquiry and statement was also recorded from him.
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6. At this juncture, the petitioner received the impugned
provisional release order dated 16.07.2025 from the 2nd respondent,
informing that the Additional Commissioner of Customs has approved the
provisional release of the goods covered under the Bill of Entry dated
16.01.2025 in terms of Section 110 of the Customs Act, after paying the
re-determined duty as mentioned in the seizure memo and the petitioner
executing a bond for a sum of Rs.39,00,000/- and the petitioner also
furnishing Bank Guarantee for a sum of Rs.8,00,000/-. It was also informed
to the petitioner that they must also give an undertaking to fully comply with
the adjudication out come and pay any Additional Duty, Fine or Penalty that
may be imposed in the said proceedings.
7. The petitioner aggrieved by the impugned provisional release
order dated 16.07.2025, issued by the 2nd respondent, has approached this
Court.
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8. 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.
9. 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 provisional release order is liable to be
interfered by this Court.
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10. 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 16.07.2025. Hence, it was contended that there is
absolutely no reason for interfering with the provisional release order.
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11. This Court has carefully considered the submissions made on
either side and the materials available on record.
12. 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
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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.”
13. 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:
(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
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the cargo within seven (7) days therefrom, which shall be subject to the
result of the adjudication of the show-cause notice.”
14. In the case in hand, the goods that are involved are PVC
coated fabric, 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 provisional
release order has been passed.
15. The relevant conditions that have been imposed in the
provisional release order are as follows:
Specific Conditions:
1. The importer shall file the DTA Bill of Entry for
provisional release for the re-determined value and shall pay re-
determined duty as mentioned in seizure memo and/or NOC
issued by the DRI, HQ, New Delhi.
2. The importer shall execute a Bond for
Rs.39,00,000/- (Rupees Thirty Nine Lakhs only).
3. The importer shall furnish a Bank Guarantee (BG)
for Rs.8,00,000/- (Rupees Eight Lakhs only).”
16. Taking into consideration the facts and circumstances of the
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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 shall execute a bond for a sum of
Rs.39,00,000/- (Rupees Thirty Nine Lakhs only); and
d) The petitioner shall also execute a bond for a sum
of Rs.8,00,000/- (Rupees Eight Lakhs only) instead of Bank
Guarantee. On compliance, the goods shall be released by the
respondents within a period of seven days from the date of
compliance of the conditions.
17. This Court is inclined to interfere with the provisional release
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order only insofar as the direction given to the petitioner to furnish a Bank
Guarantee for a sum of Rs.8,00,000/-. 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.
18. 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.
In the result, the writ petition is disposed of in the above terms.
Connected W.M.P. is closed.
17.10.2025
(3/4)
gya
Index : Yes / No
Neutral Citation : Yes / No
N.ANAND VENKATESH, J.
gya
To
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1.The Principal Commissioner of Customs (Preventive)
Custom House, No.60, Rajaji Salai
Chennai – 600 001
2.The Additional Commissioner of Customs (NDR-FTWZ)
O/o.The Principal Commissioner of Customs
Preventive Commissionerate
Custom House, No.60, Rajaji Salai
Chennai – 600 001
17.10.2025
(3/4)
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