Classification as Raw or Roasted Cashew: Bombay HC Orders DRI To Provisionally Release Seized Consignment
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The Bombay High Court has directed provisional release of cashew consignments seized by the Directorate of Revenue Intelligence (DRI) from businessman Vyom Raichanna, amid an ongoing classification dispute and pending adjudication.
The Bench of Justice M.S. Sonak and Justice Jitendra Jain while considering the perishable nature of the goods and the financial implications of prolonged detention—including demurrage of Rs. 50 lakhs already accrued—allowed provisional release of the consignment subject to the condition that the the petitioner must furnish a bank guarantee of Rs. 2.5 crore from HDFC Bank; and a bond of Rs. 3.25 crore to secure the balance.
The bench directed the customs authorities to issue a show-cause notice by July 15, 2025, and required the petitioner to respond within 15 days of its receipt. The adjudicating authority must dispose of the matter within six weeks thereafter.
The petitioner, Vyom Raichanna, proprietor of Trinity Agro Products, had moved the court alleging wrongful seizure of imported goods at Nhava Sheva Port by customs authorities. The seizure was reportedly based on a disagreement over whether the imported cashew kernels were roasted or raw, which has significant implications for classification, customs duty, and import restrictions.
The core issue pertains to the classification of the imported cashew kernels. The petitioner relies on earlier Advance Ruling Authority decisions and a favorable report from the Mumbai lab suggesting that the goods are roasted cashew kernels.
Dr. Sujay Kantawala, the Counsel on behalf of the Petitioner submitted that the imported goods were seized in March/April 2025. These goods are perishable in nature and any further delay will be in the interest of neither of the parties. Even if the Respondents’ version is accepted, the duty payable would be in the range of about Rs. 5.75/- Crores at the highest. He submitted that the Petitioner is required to pay an additional demurrage of about Rs. 50 Lakhs for no fault of the Petitioner company.
Dr. Kantawala content that taking into account all these factors, the Petitioner, without prejudice, is offering the bank guarantee in the amount of Rs. 1 Crore and the bond to secure the balance. The interest of justice would be served if the goods were directed to be provisionally released subject to these conditions of a bank guarantee and bond.
The DRI contended, citing reports from the Kerala laboratory (the designated authority for cashew testing), that the goods are in fact raw “Baby Bits” grade cashew kernels. The classification affects the rate of duty and compliance with the 2023 import notification, which restricts import of broken cashews below a CIF value of ₹680 per kg.
The Court noted that although the Kerala lab report suggested the goods were raw kernels, the matter remains disputed, and the goods are not contraband per se. Import restrictions are triggered only if the CIF value is below ₹680/kg, which remains to be conclusively
The court clarified that all contentions—on classification, applicability of the Advance Ruling, and prohibition under import norms—remain open for adjudication during the show-cause proceedings. It also permitted the petitioner to seek waiver of demurrage and asked authorities to consider any such request in accordance with law.
Case Details
Case Title: Shri Vyom Dipesh Raichanna Versus UOI
Case No.: Writ Petition No. 4370 Of 2025
Date: 23 June 2025
Counsel For Petitioner: Dr Sujay Kantawala
Counsel For Respondent: Mr Ram Ochani
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
