Madras High Court Orders Provisional Release Of Vimpro Tech Goods Pending Adjudication

The Madras High Court on 5 August held that pendency of a Customs investigation by itself cannot be a ground to deny provisional release of imported goods when Section 110A of the Customs Act, which specifically permits provisional release of detained goods subject to conditions, applies.

Justice Hemant Chandangoudar set aside the Customs order rejecting Vimpro Tech's request for provisional release and directed the authorities to release the goods subject to conditions, while allowing the investigation and adjudication proceedings to continue. He held:

"...the interest of the revenue can be protected by imposing appropriate conditions for provisional release. There is no need to keep the goods under detention until the completion of the adjudication proceedings."

Vimpro Tech had imported plastic spare parts under a Bill of Entry dated 7 September 2025. Customs detained the consignment alleging that the goods were plastic spares for lighters and fell under Chapter 96, attracting 10% Basic Customs Duty instead of 5%. It subsequently sought provisional release of the goods, but the Customs authorities rejected its request.

The department argued that the goods appeared to have been imported in violation of Directorate General of Foreign Trade (DGFT) notifications, involved misdeclaration and remained under investigation.

Customs authorities also relied on Central Board of Indirect Taxes and Customs (CBIC) Circular No. 35/2017-Customs dated 16 August 2017 and contended that provisional release was inappropriate since the goods appeared to have been imported in violation of DGFT notifications, involved misdeclaration and were still under investigation.

Vimpro Tech, on the other hand, relied on an official Government memorandum dated 26 June 2025 authorising the import of goods described as “Employ Plastic Shell and Spare Parts for manufacturing of Gas Lighter with Plastic Holder Tray.” It contended that the goods could be provisionally released pending adjudication.

The High Court noted that Vimpro Tech had produced the official memorandum and observed that the description in the memorandum appeared to correspond with the nature of the imported goods. It held that the interest of revenue could be protected by imposing appropriate conditions for provisional release and that there was no need to keep the goods detained until completion of the adjudication proceedings.

The Bench directed the Customs authorities to release the goods subject to payment of duty at 10%, after giving credit for the duty already paid, and execution of a personal bond for the balance differential duty. It clarified:

"The provisional release shall be without prejudice to the rights of the department to continue the investigation and complete the adjudication in accordance with law."

It also directed the Customs authorities to consider Vimpro Tech's request for a detention certificate and complete the exercise within two weeks.

Accordingly, the High Court ordered provisional release of the goods while clarifying that the release would not prejudice the ongoing investigation or adjudication proceedings.

For Petitioner (s): S.Baskaran, Advocate

For Respondent (s): Saisrujan Tayi, SSC