Madras High Court Directs Provisional Release Of Imported Equipment, Rejects Reliance On Later Amendment

The Madras High Court has directed Customs authorities to consider the provisional release of consignments of second-hand highly specialised equipment.

Justice Hemant Chandangoudar held that a later amendment to the applicable exemption notification could not be relied upon to deny release of goods covered by Bills of Lading issued before the amendment came into force.

The petitioner had imported second-hand highly specialised equipment, namely digital multifunction print and copying machines, under two Bills of Entry dated July 20, 2026.

The consignments were found to contain quantities different from those declared in the invoices. The petitioner sought provisional release of the goods under Section 110A of the Customs Act on execution of a bond for 100% of the enhanced value and payment of applicable GST on the enhanced value.

The petitioner submitted that the issue was already covered by an earlier order of the Madras High Court dated July 10, 2025, in a batch of writ petitions concerning provisional release of similar goods.

Opposing the plea, the Customs Department relied on an amendment dated March 10, 2026, to the exemption notification dated July 1, 2021. The amendment provided an exemption for highly specialised equipment meeting prescribed conditions and came into force from June 15, 2026.

The Department contended that the petitioner's eligibility had to be examined with reference to the relevant date under the Customs Act.

The Court, however, noted that both Bills of Lading in the present case were dated May 19, 2026, which was prior to June 15, 2026, when the amendment came into force.

The bench observed that, in the absence of an express provision giving retrospective effect, a statutory notification operates prospectively. Therefore, the amendment relied upon by the Department could not govern imports covered by Bills of Lading issued before its commencement.

"...Unless a statutory notification expressly provides for retrospective operation, it can only operate prospectively...", the Court said.

The Court accordingly held that the Customs authorities could not refuse to consider the petitioner's request for provisional release by relying upon the subsequent amendment.

"...Therefore, the amendment relied upon by the respondents cannot govern imports covered by a Bill of Lading issued prior to its commencement. Consequently, the respondents cannot refuse to consider the petitioner's request for provisional release by placing reliance upon the said amendment", the Court said.

The Court also noted that the issue concerning provisional release of similar imported goods had already been considered in its July 10, 2025 order and that the Department had not pointed out any distinguishing feature warranting a different view.

The Customs authorities were directed to consider the petitioner's request for provisional release under Section 110A and pass appropriate orders, subject to such conditions as may be considered necessary, within four weeks.

After the petitioner complied with the conditions, the goods were directed to be provisionally released within a further period of two weeks.

The court clarified that the provisional release would remain subject to the outcome of the adjudication proceedings and that the adjudicating authority would decide the matter independently on its merits.

For Petitioner: Advocate Anirudh A Sriram

For Respondent: Senior Standing Counsel Sai Srujan Tayi