Delhi High Court Frowns Upon Customs Dept. for Imposing Rs. 10 Crore Security on Rs. 1 Crore Goods
Delhi HC Terms demand ‘extremely onerous’; directs reduced bond and bank guarantee for release of roasted areca nuts.
The Delhi High Court has termed the Customs Department’s demand for a Rs. 10 crore security to release goods worth Rs. 1 crore as "extremely onerous". The case pertained to a petition seeking provisional release of roasted areca nuts imported from Indonesia, which were being held due to conflicting laboratory reports.
The bench of Justice Pratibha M. Singh and Justice Rajneesh Kumar Gupta were hearing a writ petition filed against the Customs Department’s conditions for provisional release.
The bench observed that, “Even if the Department’s assessed value of the goods is considered, the demand of a personal bond exceeding ₹4.10 crore and a bank guarantee of over ₹5.81 crore—amounting to nearly ₹10 crore—is excessive.”
The petitioner/assessee had imported five containers of roasted areca nuts, classified under Customs Tariff Heading 2008 19 20 as per an Advance Ruling by the Customs Authority for Advance Rulings (CAAR). Three Bills of Entry were filed at ICD Patparganj, Delhi, and classification was done accordingly.
However, upon inspection, the Customs Department sent samples of the goods to the Central Revenues Control Laboratory (CRCL). The lab returned inconsistent results, declaring some samples fit and others unfit for consumption. A re-test yielded similar discrepancies.
Following these results, the Customs Department imposed a security requirement including a bond and bank guarantee totaling around Rs. 10 crore for provisional release of the goods. The petitioner argued that the actual value of the goods was just Rs. 1 crore and the security asked was disproportionate.
The Customs Department, represented by Senior Standing Counsel Anurag Ojha, claimed that the goods were valued at ₹4.10 crore as per the minimum import price, justifying the security conditions.
The Court strongly criticized the imposed conditions, noting that the goods had already been cleared for industrial use only. It found the imposed security to be unreasonable even if the Department’s valuation was accepted.
The Court ultimately directed that the petitioner furnish a personal bond of ₹4.10 crore and a reduced bank guarantee of ₹50 lakh within two weeks. Upon compliance, the goods are to be provisionally released by the authorities.
Case Details
Case Title: M/S Shreehari Ananta Overseas Pvt. Ltd. Versus Customs Commissioner
Case No.: W.P.(C) 8788/2025
Date: 02/07/2025
Counsel For Petitioner: Arjun Raghvendra
Counsel For Respondent: Anurag Ojha
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.
