Provisional Release Can’t Be Denied Solely On Dept. Suspicion Of Misclassification And Undervaluation Of Imported Goods: CESTAT

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has held that an importer is entitled to provisional release of seized goods and currency where the issue relating to classification of the imported goods had already been settled in the importer’s favour in earlier proceedings. The bench of Ashok Jindal (Judicial Member) has ruled that the provisional release could not be denied merely because the department suspected misclassification and undervaluation of imported goods. The dispute arose in the case of Ramabors Exim LLP v. Commissioner of Customs, Indore, where intelligence gathered by the Directorate of Revenue Intelligence (DRI), Raipur led authorities to intercept imported consignments declared as “draping tubes (window curtain parts/accessories)” imported under a Bill of Entry filed at ICD, MMLP, Naya Raipur. During examination proceedings, samples from the imported goods were drawn and sent for testing and valuation. The investigation subsequently took a different turn when a government-approved valuer estimated the fair import value of the goods at approximately ₹2.54 crore, substantially higher than the declared value of around ₹21.24 lakh. Laboratory examinations carried out by Bhilai Steel Plant and the Central Revenue Control Laboratory (CRCL), New Delhi indicated that the goods were stainless steel tubes containing chromium, manganese and nickel and were appropriately classifiable under Chapter 73 of the Customs Tariff rather than Chapter 83 as originally declared by the importer. Based on these findings, customs authorities seized the goods and also seized cash amounting to approximately ₹2.53 crore during the investigation. Following the seizure, the importer moved an application under Section 110 of the Customs Act, 1962 seeking provisional release of both the seized goods and currency. However, customs authorities rejected the request, leading to the appeal before the Tribunal. The appellant argued that the controversy surrounding the classification of the imported goods had already been adjudicated in the importer’s own earlier cases. It was submitted that by a previous final order dated January 8, 2026, the Tribunal had already ruled that the imported products were appropriately classifiable under Chapter 83. Further, the Tribunal had also previously permitted provisional release of similar goods imported by the appellant in an order dated August 5, 2024. The department argued that the investigation had revealed that the imported goods were actually stainless steel tubes and that the seized cash was intended to be transferred to overseas suppliers through hawala channels. Accordingly, the department argued that absolute seizure was justified and release should not be granted. The Tribunal initially considered a preliminary legal issue—whether a Single Member Bench had jurisdiction to entertain a matter relating to provisional release of goods. Relying on the earlier decision in Rajguru Enterprises Pvt. Ltd. v. Commissioner of Customs (Preventive), Mumbai, CESTAT observed that where no duty demand or penalty had been adjudicated and the issue related solely to provisional release, the matter could indeed be heard by a Single Member Bench. The Tribunal noted that the appellant had already received relief in similar matters and that the classification issue itself had ultimately been decided in the importer’s favour. The Tribunal therefore held that denial of provisional release in the present matter could not be sustained. CESTAT directed provisional release of both the seized goods and the seized currency upon execution of a bond equivalent to the value of the goods together with the probable amount of fine and penalty that might eventually be imposed. The Tribunal also clarified that its order was confined solely to provisional release and would not influence any subsequent proceedings on the merits of the case. Case Details Case Title: Ramabors Exim LLP Versus Commissioner Of Customs-Indore Citation: JURISHOUR-1326-CES-2026(DEL) Case No.: Customs Appeal No. 50182 Of 2026 Date: 20/05/2026 Counsel For Appellant: Vineet Kumar Singh, Advocate Counsel For Respondent: Ram Parvesh Prasad, Authorised Representative Click Here To Read Order Read More: S. 108 Statements Can’t Be Sole Basis Without Following Section 138B Procedure: CESTAT

Provisional Release Can’t Be Denied Solely On Dept. Suspicion Of Misclassification And Undervaluation Of Imported Goods: CESTAT

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