Madras High Court
M/S.Kani International vs The Intelligence Officer (Ci) on 29 October, 2025
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
Writ Petition No.40813 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 29.10.2025
CORAM
THE HONOURABLE MR.JUSTICE N.ANAND VENKATESH
W.P. No.40813 of 2025
and
W.M.P.Nos.45731 & 45732 of 2025
M/s.Kani International
Rep by its Proprietrix Mrs.Karuvelan Kani
H.No.19/22, 5th Street, B.V.Nagar
3rd Main Road, Palavanthangal
Chennai – 600 114. ... Petitioner
Vs.
1.The Intelligence Officer (CI),
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhavan, I.P. Estate,
New Delhi.
2.The Principal Commissioner of Customs (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
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Writ Petition No.40813 of 2025
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/HQ-CI/B CELL/50D/ENQ-1/2025/1252, dated
05.05.2025 passed by the first respondent herein in petitioner's Bill of Entry
No.7754919, dated 13.01.2025 and quash the same as illegal, arbitrary,
unfair, unreasonable, 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 second respondent herein to release the
goods viz., 25915.00 KGS, of Viscose Knitted Fabrics imported vide Bill of
Entry No.7754919, dated 13.01.2025, totally valued at USD 25,915.00on
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.
For Petitioner : Mr.A.K.Jayaraj
For Respondents : Mr.M.Santhanaraman
Senior Standing Counsel for R1
J.Harikrishna
Mr.R.P.Pragadeesh
Senior Panel Counsel for R2 & R3
ORDER
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Writ Petition No.40813 of 2025
This writ petition has been filed challenging the provisional
release order dated 05.05.2025 passed by the first respondent and for a
consequential direction to the first 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 towards the adjudication levies,
if any.
2. Heard Mr.A.K.Jayaraj, learned counsel for the petitioner and
Mr.M.Santhanaraman, learned Senior Standing Counsel for the first
respondent and Mr.J.Harikrishna and Mr.R.P.Pragadeesh, learned Senior
Panel Counsel appearing for the second and third respondents.
3. The petitioner had placed order with a supplier in China for
supply of Viscose Knitted Fabrics and one of the consignment reached the
Chennai Port and the same was also taken to the SEZ Ware House in
Nandiampakkam, Chennai. The petitioner had imported 25915 Kgs. of
Viscose Knitted Fabrics from China, valued at USD 25915.00. The goods
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Writ Petition No.40813 of 2025
were shipped under invoice dated 28.12.2024 and the Bill of Entry was filed
dated 13.01.2025 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. An investigation was done and summon was issued to the
petitioner and her husband to appear before the Investigating officer at New
Delhi and the petitioner's husband attended the enquiry and the statement
was also recorded from him. At this juncture, the petitioner received the
impugned provisional release order dated 05.05.2025 from the first
respondent, informing the petitioner provisional release of the goods in
terms of Section 110A of the Customs Act read with guidelines issued under
Board Circular No.35/2017-Customs, dated 16.08.2017.
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Writ Petition No.40813 of 2025
6. The petitioner would further submit that the subject goods are
freely importable and cheaper in price. She also added that on an earlier
occasion, identical goods were also assessed and released by the Customs
Officers, by accepting the value declared in the Bill of Entry.
7. The petitioner aggrieved by the impugned provisional release
order dated 05.05.2025, issued by the first respondent, has approached this
Court.
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)
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Writ Petition No.40813 of 2025
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 first respondent to impose
onerous conditions as a condition precedent for release of the goods and
accordingly, contended that the provisional release order is liable to be
interfered by this Court.
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
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Writ Petition No.40813 of 2025
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.
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
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Writ Petition No.40813 of 2025
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.”
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:
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Writ Petition No.40813 of 2025
“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.”
14. In the case in hand, the goods that are involved are Viscose
Knitted 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 provisional
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Writ Petition No.40813 of 2025
release order has been passed.
15. In the impugned order, the first respondent has stated as
follows:
"2. In this regard, the provisions of provisional release of
seized goods pending investigation, under Section 110A of the
Customs Act, 1962 read with guidelines issued under Board's
Circular No.35/2017-Customs, dated 16.08.2017 are brought to
your attention for information."
16. 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 shall execute a bond for a sum of
Rs.90,71,176.80p (Rupees Ninety Lakhs Seventy One
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Writ Petition No.40813 of 2025
Thousand One Hundred and Seventy six and paisa
eighty only) 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.
17. 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.
19. In the result, the writ petition is disposed of in the above terms.
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Writ Petition No.40813 of 2025
No costs. Consequently, connected miscellaneous petitions are closed.
29.10.2025
NCC: Yes / No
Index : Yes / No
Speaking Order : Yes / No
ds
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Writ Petition No.40813 of 2025
To
1.The Intelligence Officer (CI),
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhavan, I.P. Estate,
New Delhi.
2.The Principal Commissioner of Customs (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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Writ Petition No.40813 of 2025
N.ANAND VENKATESH, J.
ds
Writ Petition No.40813 of 2025
29.10.2025
(½)
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