Madras High Court Directs Provisional Release Of 119 Machines, Rejects Retrospective Customs Rule

The Madras High Court on 3 August held that a Customs notification that came into force after the shipment of imported goods could not be applied retrospectively to deny provisional release of the goods.

Justice Hemant Chandangoudar directed the Customs authorities to consider the request of S.P. Associates, represented by its proprietor Yogendra Pratap, for provisional release of 119 used digital multifunction printing, copying and scanning machines imported under a Bill of Entry dated 17 July 2026. He held:

“Admittedly, the Bill of Lading in the present case is dated 12.05.2026, which is prior to 15.06.2026, the date on which the amendment came into force. In the absence of any express provision giving retrospective effect to the amendment, it can operate only prospectively. Therefore, the respondents cannot rely upon the amended notification to reject or refuse to consider the petitioner's request for provisional release.”

The machines had been shipped under a Bill of Lading dated 12 May 2026. S.P. Associates sought their provisional release under Section 110A of the Customs Act, 1962.

The Customs Department opposed the request, relying on an amendment dated 10 March 2026 that introduced an exemption for Highly Specialised Equipment, subject to certain conditions. The Department submitted that the amended provisions came into force on 15 June 2026 and applied to imports of fewer than 100 units per model per year. It also argued that the applicable duty and exemption had to be determined with reference to the date on which the Bill of Entry was filed.

The Court, however, noted that the Bill of Lading was dated 12 May 2026, before the amendment came into force on 15 June 2026. It held that, in the absence of any provision giving the amendment retrospective effect, it could operate only from 15 June 2026. It also referred to an earlier case in which the Customs Department had itself submitted that the Bill of Lading date could be treated as the date of shipment for practical purposes.

Accordingly, the High Court directed the Customs authorities to consider S.P. Associates' request for provisional release under Section 110A and pass an appropriate order within four weeks. If S.P. Associates complied with the conditions imposed by Customs, the goods were to be released within two weeks thereafter.

It clarified that the provisional release would remain subject to the outcome of the adjudication proceedings. Lastly, it also directed that the applicable rate of duty would be determined in accordance with the Customs Act.

For Petitioner: S.Shriram, Advocate

For Respondent: .G.Meganathan, JSC