Undervaluation & Misclassification of PVC Coated Fabrics: Madras HC Orders DRI to Release after Importer Pays Duty & Executes ₹12.4 Cr Bonds [Read Order]
The Madras High Court referenced precedents where the need to balance revenue interests with avoidance of excessive hardship at the stage of provisional release were discussed.
The Madras HighCourt recently ordered the provisional release of PVC Coated Fabrics seized by the Directorate of Revenue Intelligence (DRI), subject to the importer paying the declared duty, remitting 50% of the differential duty and executing bonds in lieu of a bank guarantee.
The petitioner, Exim India Global had imported PVC Coated Fabrics under multiple Bills of Entry between January and March 2025, which were moved to the Special Economic Zone unit at Nandiyambakkam, Chennai. The DRI later initiated an investigation and detained the consignments pending test reports.
On July 29, 2025, the Additional Commissioner of Customs (SEZ-FTWZ) issued a Provisional Release Order demanding a bank guarantee of ₹2.78 crore and a bond equivalent to the re-determined value of ₹9.63 crore. Aggrieved, the importer has approached the Madras High Court through the present petition, seeking modification of the stipulated conditions.
S. Baskaran appeared for the petitioner and submitted that the case was squarely covered by the earlier decision of the High Court in M/s Shree SaiImpex Vs The Principal Commissioner Of Customs (Preventive) Customs And Anr. (W.P. No. 32472 of 2025) dated September 18, 2025, where the High Court had relaxed the conditions imposed on the appellant in similar circumstances. It was argued that the same parameters should apply in the present case.
Revathi Manivannan represented the Customs Department and opposed the plea, submitting that the Department had re-determined the value of the goods at ₹9.63 crore and the importer was liable to pay the re-determined duty of ₹2.78 crore or furnish the required bank guarantee.
Justice N. Anand Venkatesh examined the issue within the framework of Section 110A of the Customs Act, 1962, noting that adjudication of the show-cause notice was still pending. The Court referenced its prior rulings, including Green Line v. Commissioner of Customs (2016) and Sri Venkateshwara Paper Boards v. Commissioner of Customs (2022), where the need to balance revenue interests with avoidance of excessive hardship at the stage of provisional release were extensively discussed.
Applying the same rationale as was held in the cited precedents, the High Court modified the conditions imposed in the impugned order. It directed the petitioner to remit the duty declared by them, pay 50% of the differential duty on the re-determined value of ₹9.63 crore, execute a bond for ₹9.63 crore and execute a further bond for ₹2.78 crore in lieu of the bank guarantee. Upon compliance, the Customs authorities were directed to release the goods within seven days.
Accordingly, the writ petition was disposed of with the above directions, and the connected miscellaneous petitions were closed without costs.
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