Madras HC Orders Release of DRI-Seized Knitted Fabrics: Importer to Pay Declared Duty, 50% Differential Duty & Execute Bonds [Read Order]

The Madras High Court recently ordered the provisional release of viscose knitted fabrics that was seized by the Directorate of Revenue Intelligence (DRI) during the import process after laying down conditions that the importer is to abide by to secure the release of the goods.

The petitioner, S.U. Sirajdeen, being the proprietor of M/s Gravity Ventures had imported knitted fabrics through multiple Bills of Entry which were moved to the Special Economic Zone at Nandiyambakkam.

Against the imports, the DRI initiated an investigation and issued a seizure memo dated February 13, 2025 and thereafter gave a No Objection Certificate (NOC) for five of the consignments. The Madras High Court had earlier issued an interim direction for provisional clearance in W.P.No.4279 of 2025 dated February 14, 2025 directing the Principal Commissioner of Customs (Preventive) to provisionally release the goods after collecting the bond or bank guarantee or security deposit.

Pursuant to the seizure by the DRI, the customs issued an intimation dated March 6, 2025 requiring a bank guarantee of ₹2.80 crores and a bond to the re-determined goods’ value of ₹3,15,01,438; it is against this action that the petitioner has approached the High Court seeking quashal of the intimation and to secure provisional release of the goods.

Hari Radhakrishnan, appearing for the petitioner and, as recorded in the order, submitted that the issue was squarely covered by this Court’s earlier order in M/s Shree Sai Impex VsThe Principal Commissioner Of Customs (Preventive) Customs And Anr. (2025TAXSCAN (HC) 1915) dated September 18, 2025 and that the case was squarely applicable to the instant case.

K.S. Ramaswamy, Senior Panel Counsel for the first respondent, vehemently opposed the petition, arguing that the authority had re-determined the value at ₹3,15,01,438 and that the importer must either pay the re-determined duty of ₹1,43,21,357 or furnish the bank guarantee as directed by the Department.

A Single-Judge bench of Justice N. Anand Venkatesh examined the materials and confined the task to whether the provisional-release conditions warranted interference. Noting that the first respondent acted under Section 110A of the Customs Act, 1962 and that adjudication on the show-cause notice was still pending, the High Court applied the yardstick of earlier decisions including its own decision in Shree Sai Impex (supra) to balance revenue protection against undue hardship the importer.

Accordingly, the Madras High Court modified the conditions imposed in the impugned intimation letter directed that the petitioner remit the entire duty as declared by them, pay 50% of the differential duty in respect of the re-determined value of ₹3,15,01,438 and execute a bond for ₹3,15,01,438 as well as a further bond of ₹2,80,00,000 in lieu of the bank guarantee.

Upon compliance by the petitioner to the conditions imposed by the Court, the respondents were directed to release the goods within seven days. With such directions, the High Court disposed of the petition and connected the miscellaneous application without costs.

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