Delhi High Court Denies Relief Against Customs Seizure Of Mislabelled Chinese Goods - 2025-09-04

Delhi High Court Denies Relief Against Customs Seizure Of Mislabelled Chinese Goods

In a significant ruling, the High Court of Delhi has refused to intervene in the seizure of nearly half a million units of mobile tempered glass by the Customs Department. A bench comprising Justice Prathiba M. Singh and Justice Shail Jain dismissed the petition, which sought the provisional release of goods seized from a premises in Karol Bagh, Delhi, without the mandatory bank guarantees imposed by the authorities.

The Karol Bagh Raid

The dispute originated from a search conducted by the Customs Department on February 20, 2025, at a residential property in Karol Bagh that was operating as a girls' PG accommodation. During the search, officials discovered multiple cartons of mobile tempered glass, all bearing the label "Made in China." Following the discovery, the Customs Department seized approximately 4,99,020 units of the product, citing them as potentially illegal imports with an estimated assessable value of over ₹56 lakhs.

Conflicting Claims of Origin

The petitioner challenged the seizure, arguing that the products were 100% locally manufactured and had been sourced from the local market. The petitioner maintained that no foreign purchase orders were placed, nor was any Customs broker involved. However, the petitioner’s counsel made a striking admission during the hearing: while the goods were supposedly manufactured locally, they were intentionally affixed with labels reading "Made in China," "Made in USA," and other foreign origins to command higher market prices.

The Customs Department argued that the release of the seized goods could only be permitted upon the submission of bonds equivalent to the assessable value of ₹56,03,995 and a bank guarantee of ₹29,75,189. The petitioner claimed an inability to meet these financial obligations, seeking court intervention to bypass these conditions.

Judicial Analysis on Deceptive Labeling

The High Court observed that the petitioner’s claims of local manufacturing were fundamentally undermined by the labeling found on the products. The bench emphasized that regardless of the actual origin of the goods, the practice of mislabeling products to deceive consumers is a matter of public concern.

The Court noted that such practices are particularly damaging in the current regulatory environment where the government is actively promoting the "Make in India" initiative. By labeling domestic goods as foreign, the petitioner had engaged in a deceptive practice that contradicts the overarching public policy aimed at encouraging local manufacturing.

Key Observations

The judgment highlighted the gravity of consumer deception: * "Even if these are locally manufactured goods but are shown as ‘Made in China’ or in some other foreign country, such incorrect misdeclaration even to the consumers would be contrary to overall public interest." * "The stand of the Petitioner, that the goods are locally manufactured goods, is belied by the labels affixed on the products." * "This would require a factual enquiry, which cannot be gone into by this Court in this writ petition."

Final Ruling

Finding no merit in the petitioner's request to waive the Customs Department’s conditions for provisional release, the Court declined to interfere with the impugned communication dated June 10, 2025. The petition was disposed of with the observation that the petitioner remains free to pursue an appellate remedy under Section 128 of the Customs Act, 1962 , and is expected to cooperate with the ongoing investigation. The order ensures that the investigation into the true origin of the products and the supply chain remains unhindered.