Security Of ₹10 Crore For Goods Worth ₹1 Crore Extremely Onerous: Delhi High Court Quashes Customs Order

The Delhi High Court has observed that imposing security of ₹10 crore for goods worth ₹1 crore is an extremely onerous decision.

The Court was considering a Writ Petition seeking issuance of direction to the Customs Department to provisionally release the Roasted Areca Nuts and quash the conditions imposed.

The division bench of Justice Pratibha M. Singh and Justice Rajneesh Kumar Gupta observed, ".....The goods have been released only for industrial use. The impugned order requires a personal bond for more than Rs. 4.10 crores along with a Bank Guarantee for a sum of over Rs. 5.81 crores i.e., the overall security demanded is almost Rs. 10 crores. Even if the value as stated by the Department is taken into consideration, bearing in mind the value of goods itself, the conditions for provisional release are clearly onerous."

The Petitioner was represented by Advocate Arjun Raghvendra while the Respondent was represented by Senior Standing Counsel Anurag Ojha.

Facts of the Case

The Case of the Petitioner was that it had obtained an Advance Ruling from Customs Authority of Advance Ruling, that the goods are to be classified under Customs Tariff Heading 2008 specifically under CTI 2008 19 20- ‘Other roasted nuts & seed’ of Chapter 20 of the First Schedule. On this basis, five containers of goods i.e. Areca Nuts were imported from Indonesia at ICD Patparganj and three bills of entry were filed. The Petitioner had classified the goods in terms of the CAAR Ruling.

The Customs Department had sent the goods for sample testing to Central Revenues Control Laboratory where some samples were found fit for consumption while others were declared unfit. The re-test was also found with same kind of inconsistencies as the original test reports. When the Petitioner sought the release of the goods, order impugned was passed.

Counsel for the Petitioner submitted that considering the value of the goods itself is ₹1 Crore, the conditions imposed are extremely onerous. On the other hand, Customs Department submitted that the value of the goods is as per the minimum import price, which is approximately ₹4.10 Crores, therefore, the conditions are not onerous.

Reasoning By Court

The Court concluded that imposing security of ₹10 crore for goods worth ₹1 crore is an extremely onerous decision. Accordingly, it was directed that the Petitioner shall furnish a bond of ₹4,10,67,000/- along with a Bank Guarantee of ₹50,00,000/- to the concerned authorities within a period of two weeks, subject to which the goods shall be released.

The Petition was accordingly disposed of.

Cause Title: M/s. Shreehari Ananta Overseas Pvt. Ltd. vs. The Commissioner of Customs ICD Patparganj (2025:DHC:5194-DB)

Appearances:

Petitioner- Advocate Arjun Raghvendra, Advocate P. R. Abhiram

Respondent- Senior Standing Counsel Anurag Ojha, Advocate Dipak Raj, Advocate Shashank Kumar, Advocate Garima Kumar

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