Gujarat HC: Customs Cannot Impose Onerous Conditions for Provisional Release

The current petition (Special Civil Application No. 9326 of 2025) is being filed by a company named M/s. Alpha Impex (the Petitioner) in the Gujarat High Court, before benches comprising Honourable Mr Justice Bhargav D. Karia and Honourable Mr Justice Pranav Trivedi, against Principal Commissioner of Customs & Anr. (respondent). The company challenged an order dated August 07, 2025.

The company, Alpha Impex, is owned by Shri Paramvir Singh, who in the past imported goods from China described as “Iron Door Plates” through the Mundra Port. When investigated, the customs discovered that some goods were misdeclared as iron door plates instead of digital printing plates, which attract anti-dumping duty. On deep investigation, a Chartered Engineer’s report dated 31.10.2023 found that the goods were actually “Computer to Conventional Plates”, not iron door plates. Meaning, an Anti-Dumping Duty (ADD) of $0.77 per sq. meter applied.

On confirming this fact, Customs seized the goods on 06.01.2024 under Section 110 of the Customs Act. The department believed, the company tried to avoid paying Anti-Dumping Duty (ADD) of Rs. 27.48 lakhs. Therefore, the department issued a Show Cause Notice (SCN) dated 29.10.2024 to the company covering the current and eight earlier consignments from the period between April 2022 and February 2023. Before the issuance of notice, the company suo motu paid Rs. 1 crore (Rs. 50 lakhs on 09.11.2023 and another Rs. 50 lakhs on 26.02.2024) as security for Anti-Dumping Duty. The company, multiple times requested the Customs Department to provisionally release the seized goods. Originally, Customs asked for a bond and a bank guarantee of Rs. 40 lakhs.

Later on 21.04.2025, the condition for provisional release imposed on 20.05.2025 was redetermined as a bond for the full value of goods and a bank guarantee amounting to Rs. 12,51,005 with an auto-renewal clause to cover the liability which may be fastened upon the company. In defence, the company claimed that they have already paid Rs. 1 crore voluntarily, which is more than enough to cover the duty on the seized goods. Hence, the department should not ask for any more money for this seizure. Further, the company claimed that the current consignment had been kept by the customs authorities in a bonded warehouse for almost two years. During this time, the goods were left open and exposed to air, which has, over time, decreased their quality and value in the market. Therefore, on 19.02.2025, the company asked for the provisional release of goods.

When the court analysed both sides, it agreed that the customs department had wrongly considered the total liability, including past consignments, while deciding the conditions for provisional release. The company has already deposited Rs. 1 crore just for seizure of goods, which is more than enough; hence, the customs department should not demand any additional money or a bank guarantee of Rs. 12.51 lakhs. The court declared this extra demand unfair. Orders the company to provide a bond for the full value of the seized goods and directs the customs department to immediately release the goods provisionally, regardless of the bank guarantee, once a bond is given.