The Additional Chief Judicial Magistrate at Esplanade, Mumbai, has granted bail to a businessman arrested by the Directorate of Revenue Intelligence in a case alleging that Chinese-origin stainless steel seamless pipes were routed through Thailand and imported into India using false certificates of origin to evade customs and anti-dumping duties.
Additional Chief Judicial Magistrate Anuradha A. Pandule observed that the investigation was primarily dependent on documentary evidence and that no useful purpose would be served by continuing the applicant’s incarceration after the DRI had already been granted his custody twice.
Buy Now: E-Magazine: 100 Landmark Customs Judgments
The case concerns the import of approximately 422 metric tonnes of stainless steel seamless pipes. According to the DRI, the goods were deliberately routed from China through Thailand and falsely declared as originating in Thailand to secure preferential customs treatment under the India-ASEAN Free Trade Area scheme.
The DRI alleged that the imports resulted in a total customs duty liability of approximately ₹22.44 crore, including anti-dumping duty of around ₹14.80 crore. The agency described the alleged violation as a serious economic offence that caused substantial loss to the government exchequer.
The bail application was filed by the accused under Section 480 of the Bharatiya Nagarik Suraksha Sanhita, 2023. He had been arrested in connection with an investigation registered under Section 135(1)(a) of the Customs Act, 1962.
The applicant was a partner in Savior Product Overseas and a director of Seminox Pipes & Tubes Private Limited. The DRI claimed that he also exercised direct control over other concerns involved in the imports and was responsible for placing purchase orders and making payments to overseas suppliers.
The DRI alleged that Forms AI, or certificates of origin, submitted for the clearance of the imported goods were not genuine documents issued by the competent authorities in Thailand.
The agency relied on an August 5, 2026 communication from the office of the Assistant Commissioner, FTA Cell. According to the communication, the competent Thai authority conducted an administrative cross-verification and stated that the Thai Department of Foreign Trade or its provincial issuing authority had not issued the three Forms AI referred for verification.
The prosecution further claimed that the applicant admitted in a statement that three country-of-origin certificates were forged and had never been issued by the Thai authorities. It also alleged that certificates used across his firms contained particulars identical to those appearing in the documents verified as fake.
The DRI maintained that physical and documentary evidence also indicated a Chinese connection. It claimed that the imported pipes carried the markings of a Chinese manufacturer and that the relevant contract contained a Chinese arbitration clause.
Bills of lading allegedly obtained during the investigation showed that Thaida Stainless Steels Tube Manufacturing Company Limited had imported stainless steel seamless pipes from China into Thailand in quantities comparable to those subsequently exported from Thailand to Indian importers.
The DRI argued that these facts indicated the alleged use of fraudulent certificates might not be an isolated occurrence, but part of a wider arrangement involving the routing and misdeclaration of imported goods and their country of origin.
Anti-dumping duty was imposed under Customs Notification No. 31/2022-Customs (ADD), dated December 20, 2022, on stainless steel seamless tubes and pipes falling under Chapter 7304 of the First Schedule to the Customs Tariff Act and originating in or exported from China.
The allegation was that the applicant’s concerns filed bills of entry for stainless steel seamless pipes supplied by the Thai company and declared the goods in the certificates of origin as “wholly obtained” in Thailand. On that basis, the importers allegedly claimed preferential tariff benefits available to qualifying goods of ASEAN origin.
The prosecution contended that the applicant’s concerns used the India-ASEAN preferential duty framework to avoid the customs and anti-dumping duties that would otherwise have applied to goods originating in China.
Dr. Sujay Kantawala, counsel on behalf of the accused denied that the imported goods originated in China. The pipes were manufactured at a facility in Thailand and that the prosecution had not established that the consignments were Chinese-origin goods.
Dr. Kantawala argued that the DRI had relied on an email dated October 20, 2025, which merely referred to different export options available to importers. According to the defence, the communication only indicated that the supplier was capable of shipping goods from Thailand and did not establish that the pipes had been manufactured in China.
The defence further questioned the differing figures mentioned during the investigation concerning the alleged duty evasion. It submitted that the remand papers referred at different places to alleged liabilities of ₹15.73 crore and ₹22 crore, while the grounds of arrest served on the applicant’s son allegedly mentioned a figure of ₹3.89 crore.
Counsel also maintained that the imported pipes had a diameter exceeding six nominal pipe size, or 168.3 millimetres, and disputed whether anti-dumping duty was attracted to the goods in question.
The applicant told the court that he had repeatedly appeared before the DRI in response to summons and supplied documents, bank statements and electronic data. His phone and email backups were also stated to be in the agency’s possession.
He alleged that his statement had been recorded under coercion during overnight questioning on August 4 and 5, 2026, and said that he had subsequently retracted it.
The defence relied on a clarification issued by the Thai supplier concerning the origin criterion recorded in the original Forms AI.
According to the material placed before the court, the supplier claimed that the original certificates mentioned the “WO”, or wholly obtained, criterion because of an inadvertent error at its end. Revised certificates were subsequently produced showing the origin criterion as “RVC + CTSH”.
The defence contended that the goods had a regional value content exceeding 58%, as against the stipulated threshold of 35%, and therefore remained eligible for preferential benefits under the India-ASEAN trade arrangement.
It was also submitted that the revised certificates could be verified through the Thai government’s Department of Foreign Trade website. Photographs showing the applicant’s visit to the manufacturing facility in Thailand were placed before the court to support the claim that manufacturing activities were undertaken there.
The DRI opposed reliance on the revised certificates and the supplier’s subsequent clarification. It argued that the authenticity, dates, basis of issuance and legal effect of the fresh documents required independent verification from the Thai authorities.
The agency said that subsequently produced material could not automatically erase the official verification already received from Thailand that the three Forms AI under inquiry had not been issued by the competent authority.
The court noted that the applicant was arrested on August 5, 2026, and had remained in custody for more than 37 days. During this period, the DRI was granted his custody on two occasions.
The court observed that the central controversy concerned competing documents and communications relating to the certificates of origin. Determining which documents were genuine would require cross-border verification and examination of records.
It further noted that a vital part of the investigation was documentary in nature and that the agency had already received opportunities to interrogate the applicant in custody.
The court found no sufficient basis to conclude that the applicant, acting alone, would tamper with the evidence. It observed that regular attendance before the investigating agency could adequately protect the investigation.
The magistrate also said that the applicant would need access to documents to establish his defence, which would be difficult while he remained in judicial custody. His release, subject to cooperation requirements, could therefore assist rather than obstruct the document-based investigation.
Holding that no purpose would be served by keeping him behind bars, the court allowed the bail application.
The applicant was directed to execute a personal bond of ₹1 lakh with one or two sureties in the same amount. The court permitted cash bail of ₹1 lakh for up to two months if he was unable to immediately arrange sureties.
He has been directed to cooperate with the investigation and appear before the DRI whenever called through written intimation. He must not influence prosecution witnesses or tamper with evidence.
The court also directed him to surrender his passport to the DRI for six months from the date of arrest and obtain prior judicial permission before travelling abroad.
He must furnish his residential address, email address and mobile number to the court and the department, and cannot change these details without prior written intimation. He must also provide the contact details and address proof of two close relatives.
Membership Required to Access Case Details & Order Copy
To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.
