HC Directs Release of Goods; Redemption Fine and Penalty Deferred on MSMEs Non-Prohibited, Low-Value Goods:

HC directs release of consignment on payment of differential duty of Rs. 24,249; CBIC directed to examine preferential timelines for start-ups and MSMEs.

Court directs release of detained consignment on payment of differential duty; CBIC asked to consider preferential timelines for start-ups and MSMEs.

Meetu Kumari

Sep 5, 2025

Last update on Sep 5, 2025

HC Directs Release of Goods; Redemption Fine and Penalty Deferred on MSMEs Non-Prohibited, Low-Value Goods The petitioner, a registered start-up under the MSME category, dealt in baby-care products, doing business under the name and style of 'Fabie Baby', imported packaging materials loaded at Dubai, which came to Mundra Port and arrived at ICD Tughlakabad. Physical examination by SIIB included a panchnama, which noted excess pieces and excess weight. The declared pieces amounted to 80,240, whereas pieces found during examination were 101,100 (excess 20,860), and the net weight came to 2,060 kgs in contrast to the declared 1,897.7 kgs. The importer accepted the variances, consented to modify the bill of entry and accepted the suggested classification/duty, but the containers were delayed, and the petitioner had to pay warehousing and demurrage charges of around Rs. 3.88 lakh on goods worth about Rs. 4.00 lakh. An Order-in-Original dated 22/08/2025 arrived at a value of the offending goods to the extent of Rs. 62,983 and differential duty fixation of Rs. 24,249; directed confiscation with a choice for redemption on payment of a redemption fine of Rs.10,000 under Section 125(1); levied a penalty of Rs. 5,000 under Section 112(a)(ii); and directed re-assessment under Section 17(4) for giving effect to the ascertained value and under-payment of duty. The petitioner challenged continued detention, demurrage liability and the delay in passing the final order by filing the present writ petition. Issue Raised: Whether continued detention of the consignment and demand of redemption fine and penalty were justified when the importer had accepted the revised classification and agreed to pay the differential duty, and when the consignment comprised non-prohibited, low-value goods. HC's Decision: The Court observed that truthful declaration is mandatory but the nature and extent of mis-declaration and the character of the goods must be weighed, particularly where low-value, non-prohibited consignments are involved and the importer is a recognised start-up/MSME. Noting that the petitioner had accepted the classification and duty position on or about 24/07/2025 and that the Customs authority delayed issuing the Order-in-Original until 22/08/2025, the Court found the delay inexplicable in the circumstances and directed release of the goods upon payment of the differential duty of Rs. 24,249. The redemption fine and penalty were held not payable at this stage; on payment of the differential duty the goods were to be released within 24 hours. The Court further directed that the CBIC and the Commissioner of Customs consider whether preferential timelines, warehousing and provisional release measures ought to be provided to start-ups and MSMEs, especially for low-value consignments. It ordered that a copy of the order be served on CBIC and the Commissioner of Customs and that affidavits be filed; respondents were directed to file counter-affidavits within two weeks. The redemption fine, penalty and compensation claims will be considered after pleadings are completed. The matter is listed on 28/10/2025. To Read Full Judgment, Download PDF Given Below

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Meetu Kumari

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