Madras High Court
M/S.Kani International vs The Principal Commissioner Of Customs ... on 29 October, 2025
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
Writ Petition No.40822 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.40822 of 2025
and
W.M.P.Nos.45745 & 45746 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 Principal Commissioner of Customs (Chennai-III)
(Preventive),
Custom House, No.60, Rajaji Salai,
Chennai - 600 001.
2.The Intelligence Officer, DRI (Hqrs)
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhavan, I.P. Estate, New Delhi.
3.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
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Writ Petition No.40822 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/CI//ENQ/69/2025-CI–O/o DG-DRI-HQ-DELHI/1183,
dated 30.05.2025 vide Seizure Memo passed by the second respondent
herein in petitioner's Bill of Entry No.8476540, dated 21.02.2025 and quash
the same as illegal, arbitrary, unfair, unreasonable, violation of principles of
natural justice and perverse insofar 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 Hon'ble Division Bench of Delhi High Court and
direct the respondents herein to release the goods viz., 64173 SQM., of PVC
Coated Fabrics imported vide Bill of Entry No.8476540, dated 21.02.2025,
totally valued at USD 12834.60 for 64173 SQM., 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.
For Petitioner : Mr.A.K.Jayaraj
For Respondents : Mr.M.Santhanaraman
Senior Standing Counsel for R2
J.Harikrishna
Mr.R.P.Pragadeesh
Senior Panel Counsel for R1 & R3
ORDER
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Writ Petition No.40822 of 2025
This writ petition has been filed challenging the Seizure Memo
dated 30.05.2025 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.M.Santhanaraman, learned Senior Standing Counsel for the second
respondent and Mr.J.Harikrishna and Mr.R.P.Pragadeesh, learned Senior
Panel Counsel appearing for the first and third respondents.
3. The petitioner had placed order with a supplier in China for
supply of PVC Coated 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 64173 SQM., of
PVC Coated Fabrics from China, valued at total USD 12834.60. The goods
were shipped under invoice dated 05.01.2025 and the Bill of Entry was filed
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Writ Petition No.40822 of 2025
dated 21.02.2025 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, 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 30.05.2025 from the second respondent stating that as per the
CRCL Test Report, the goods have to be re-classified and therefore, the
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Writ Petition No.40822 of 2025
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
30.05.2025, issued by the second respondent, has 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
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Writ Petition No.40822 of 2025
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 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 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
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Writ Petition No.40822 of 2025
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. 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.
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,
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Writ Petition No.40822 of 2025
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
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Writ Petition No.40822 of 2025
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 the cargo within seven (7)
days therefrom, which shall be subject to the result of the
adjudication of the show-cause notice.”
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Writ Petition No.40822 of 2025
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.
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.”
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Writ Petition No.40822 of 2025
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 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
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Writ Petition No.40822 of 2025
the goods released in its favour.
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.
29.10.2025
NCC: Yes / No
Index : Yes / No
Speaking Order : Yes / No
ds
To:
1.The Principal Commissioner of Customs (Chennai-III)
(Preventive),
Custom House, No.60, Rajaji Salai,
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Writ Petition No.40822 of 2025
Chennai - 600 001.
2.The Intelligence Officer, DRI (Hqrs)
Directorate of Revenue Intelligence,
7th Floor, Drum Shaped Building,
I.P. Bhavan, I.P. Estate, New Delhi.
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.40822 of 2025
N.ANAND VENKATESH, J.
ds
Writ Petition No.40822 of 2025
29.10.2025
(2/2)
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