Madras High Court
M/S.Shiv Sai Associates vs The Principal Commissioner Of Customs ... on 31 October, 2025
Author: N.Anand Venkatesh
Bench: N. Anand Venkatesh
1/15 WP No. 41315 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 31-10-2025
CORAM
THE HONOURABLE MR JUSTICE N. ANAND VENKATESH
WP No. 41315 of 2025
and WMP Nos. 46256 & 46257 of 2025
M/s.Shiv Sai Associates
Rep. by its Proprietor G.Balaji,
No.51/52, Real Towers, 1st Floor,
Royapettah High Road, Mylapore,
Chennai-600 004.
Petitioner(s)
Vs
1.The Principal Commissioner of Customs (Preventive)
Custom House, No.60, Rajaji Slaai,
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
Respondent(s)
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2/15 WP No. 41315 of 2025
PRAYER Writ Petition filed under Article 226 of the Constitution of India for
issuance of a 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.8311255, dated 12.02.2025
and quash the same as illegal, arbitrary, unfair, un-reasonable, violation of
principles of natural justice and perverse in so far 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., 56500.92 sqm. of PVC Coated Fabric imported vide Bill
of entry No.8311255, dated 12.02.2025, totally valued at USD 3,390.06 for
56500.92 sqm., without insisting for payment of Duty on the re-Determined
Value and without insisting for furnishing Bank Guarantee for Rs.9,00,000/-
For Petitioner(s): Mr.A.K. Jayaraj
For Respondent(s): Mr.R.P.Pragadish
Senior Standing Counsel for
J.Harikrishna
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
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payment of duty on the re~determined value and without insisting furnishing of
Bank Guarantee for a sum of Rs.9,00,000/-.
2.Heard the learned counsel for the petitioner and the learned counsel
appearing on behalf of the respondents.
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 56500.92 SQM of PVC coated fabric from China,
valued at USD 3390.06. The goods were shipped under invoice dated
04.01.2025 and the Bill of Entry was filed dated 12.02.2025 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
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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.
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 12.02.2025 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.9,00,000/-. 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
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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.
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.
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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.
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
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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.
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
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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.
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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
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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 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:
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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. The Bill of Entry shall be
assessed provisionally in view of pending investigation.
2. The importer shall execute a Bond for Rs.39,00,000/-.
3. The importer shall furnish a Bank Guarantee(BG) for
Rs.9,00,000/-.
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
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Rs.39,00,000/-; and
d) The petitioner shall also execute a bond for a sum of
Rs.9,00,000/- 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 order
only insofar as the direction given to the petitioner to furnish a Bank Guarantee
for a sum of Rs.9,00,000/-. 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.
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In the result, the writ petition is disposed of in the above terms.
Connected W.M.P. is closed.
31-10-2025
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 (Preventive)
Custom House, No.60, Rajaji Slaai,
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
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N.ANAND VENKATESH J.
ssr
31-10-2025
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