The Madras High Court has permitted re-export of the goods to the foreign supplier, subject to stringent financial conditions.
The case involved 804 bales of textile fabric coated with plastics imported from China by a Tamil Nadu-based trader through Bill of Entry No. 7705755 dated January 10, 2025. The goods were detained following an investigation by the Directorate of Revenue Intelligence (DRI), which alleged that the importer had misclassified the product under an incorrect Customs Tariff Heading (CTH).
To ensure protection of revenue interests, the bench of Justice N.Anand Venkatesh laid down the various conditions for re-export.
Firstly, the importer must execute a bond for the total value of the differential duty payable.
Secondly, the importer must furnish a bank guarantee equivalent to 20% of the re-determined value;
Thirdly, upon compliance with the above conditions, the authorities shall permit re-export within 12 days.
The bench observed that “for the purpose of adjudication, it is not necessary to retain the goods in India,” and that balancing conditions would adequately safeguard the Customs Department’s interests.
Background
The petitioner-importer, M/s.Changing Seasons had filed a warehousing Bill of Entry for SEZ import and claimed clearance. However, authorities suspected misclassification and sent samples to the Central Revenues Control Laboratory (CRCL), New Delhi for testing. Based on the CRCL report, the DRI seized the consignment on April 4, 2025, contending that the goods were incorrectly declared and liable for confiscation under Section 111 of the Customs Act, 1962.
Despite repeated representations, the goods remained detained for months, prompting the petitioner to move the High Court seeking permission to re-export the consignment back to the Chinese supplier, who had agreed to take back the goods.
Conclusion
The court held that even in cases of misclassification, the Customs authorities could impose a fine in lieu of confiscation under Section 125, and therefore, retaining the goods indefinitely was unnecessary.
Case Details
Case Title: M/s.Changing Seasons Versus The Principal Commissioner of Customs (Chennai-III)
Case No.: Writ Petition No.37744 of 2025
Date: 07.10.2025
Counsel For Petitioner: A.K.Jayaraj
Counsel For Respondent: K.Mohanamurali
