A Mumbai court has granted bail to a 24-year-old businessman arrested by the Directorate of Revenue Intelligence (DRI) in an alleged ₹22.44 crore customs duty evasion case involving stainless steel seamless pipes purportedly routed from China through Thailand.
Additional Chief Judicial Magistrate Anuradha A. Pandule of the 19th Court, Esplanade, observed that a vital part of the investigation was based on documentary evidence and that the applicant’s continued custodial confinement was not warranted. The court said the requirements of the investigation could be adequately protected by imposing appropriate bail conditions.
The bail application arose from an investigation registered by the DRI’s Mumbai Zonal Unit under Section 135(1) of the Customs Act, 1962.
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Alleged misuse of India-ASEAN preferential duty benefit
According to the DRI, approximately 422 metric tonnes of stainless steel seamless pipes were routed from China through Thailand and imported into India by falsely declaring Thailand as their country of origin.
The agency alleged that the imports were made using proof-of-origin certificates to claim preferential customs treatment under the ASEAN-India Free Trade Area framework.
The DRI estimated the total customs duty implication at approximately ₹22.44 crore, including anti-dumping duty of around ₹14.80 crore. It maintained that the alleged conduct was not a technical or inadvertent violation but a serious economic offence causing substantial loss to the government exchequer.
The applicant is the proprietor of M/s Industahl International and was also stated to be the authorised signatory on the relevant import documents.
Thai authorities allegedly denied issuing three certificates
The DRI told the court that three sample proof-of-origin certificates used for clearing the imported goods had not been issued by the competent authorities in Thailand.
It relied on an official communication purportedly received from the Import Administration and Origin Certification Division of Thailand’s Department of Foreign Trade. According to the agency, the Thai authority categorically stated that the three Forms AI under examination had not been issued by it or by the concerned provincial issuing authority.
The DRI further contended that the applicant had admitted in his statement recorded under Section 108 of the Customs Act that the certificates had been used for filing and clearing the Bills of Entry. It claimed that when the official response from Thailand was shown to him, he accepted that the certificates had not been issued by the Thai authorities.
The applicant subsequently retracted his statement.
Chinese imports into Thailand cited by DRI
The agency also claimed to have obtained Bills of Lading showing that the Thai supplier had imported stainless steel seamless pipes from China. The quantities imported into Thailand were allegedly comparable to those subsequently exported by the supplier to importers in India.
The investigation also allegedly found identical product markings on goods displayed on the websites of the Thai supplier and a Chinese supplier. The DRI argued that these circumstances supported its allegation that Chinese-origin products had merely been routed through Thailand to avoid customs and anti-dumping duties in India.
The agency maintained that the investigation required correlation of emails, import documents, foreign-supplier communications, Bills of Entry, certificates of origin and the statements of connected persons.
It opposed bail on the ground that releasing a key participant could enable communication with persons yet to be examined and prejudice the continuing investigation.
Applicant claimed full cooperation with investigation
Dr. Sujay Kantawala, the counsel on behalf of the applicant, submitted that searches were conducted on January 7, 2026, at the residential premises of his cousin, his own residence and the business premises of M/s Industahl International. He claimed that nothing incriminating was recovered from his residence or office.
He also said that he cooperated with the investigation by appearing before the DRI in response to multiple summons issued in April, July and August 2026. His statements were recorded, and the department had already obtained email backups, bank statements and documents relating to the imports.
The applicant argued that the investigation was almost entirely documentary and that no further custodial interrogation was necessary.
He further contended that the prescribed mechanism for questioning a certificate of origin was contained in Rule 6 of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, commonly known as the CAROTAR Rules. According to him, verification should be followed by the issuance of a show-cause notice and adjudication, but no show-cause notice had been issued to him.
Goods allegedly outside scope of anti-dumping duty
The defence disputed the DRI’s calculation of the alleged duty evasion. It argued that the imported pipes had a diameter exceeding six NPS, or 168.3 millimetres, and would not attract anti-dumping duty even if imported from a country other than Thailand, in view of Customs Notification No. 31/2022 dated December 20, 2022.
The applicant also pointed out that the investigation concerned Bills of Entry relating to October and November 2025. Most of the imported goods had already been sold in the domestic market and were no longer available for confiscation, the defence submitted.
It was further claimed that another consignment of similar goods imported from the same Thai manufacturer under a Bill of Entry dated January 2, 2026, was accepted by Customs and granted out-of-charge on January 8, 2026, after submission of a certificate of origin.
Supplier attributed discrepancy to an error
The applicant relied on communications allegedly issued by the Thai supplier regarding the Forms AI.
According to the defence, the supplier acknowledged that the original Forms AI had classified the goods under the origin criterion “WO — Wholly Obtained”. The supplier purportedly stated that the criterion had been mentioned incorrectly because of an error at its end and subsequently issued revised certificates.
The DRI, however, argued that the subsequent letter and revised certificates required independent verification from the competent Thai authorities. Their production after the applicant’s arrest could not retrospectively erase the official verification already received by the agency, it submitted.
The prosecution said the authenticity, date of issuance, applicable origin criterion and legal effect of the revised certificates could not be conclusively determined merely on the strength of a subsequent letter from the supplier.
Court finds documentary investigation can continue after release
The court noted that the applicant had remained in judicial custody for approximately 31 days and was only 24 years old.
It also considered that the applicant’s father, who was allegedly involved in handling import-related work, payments and coordination with the foreign supplier, was already in custody. The DRI had sought the father’s custody for further investigation.
The court observed that a vital part of the investigation was based on documents. The supplier’s subsequent letters, emails, Bills of Lading and other material could be investigated while securing the applicant’s attendance through written intimation.
It further remarked that the applicant needed access to documents to establish his defence, which would be difficult while he remained in judicial custody.
Addressing the DRI’s apprehension regarding tampering with evidence, the court found no substance in the contention that the applicant, acting alone, would interfere with the evidence. It took note of the fact that his father was in custody and that documents had already been seized during the searches.
“Considering all above aspects, no further custodial confinement is warranted and some terms and conditions can fulfil the purpose of investigation,” the court observed while allowing the application.
Bail granted on ₹1 lakh bond
The court directed the applicant’s release upon executing a personal recognisance bond of ₹1 lakh with one or two sureties in the like amount. It also permitted temporary cash bail of ₹1 lakh for up to two months if sureties were not immediately available.
The applicant was directed to:
- Cooperate with the continuing investigation and appear whenever called through written intimation.
- Refrain from influencing witnesses or tampering with prosecution evidence.
- Surrender his passport to the DRI for six months from the date of arrest.
- Obtain prior permission from the court before travelling abroad.
- Furnish his residential address, email address and telephone number to the court and the department.
- Not change his contact or address details without prior written intimation.
- Provide the addresses and mobile numbers of two nearest relatives, with their consent, for use if he fails to appear during the investigation or trial.
The court accordingly allowed the bail application and disposed of the proceedings. The order was dated September 4, 2026.
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