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2025 Supreme(Del) 372
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Shail Jain, JJ.
Mitraj Business Private Limited Through Its Director Mr Manoj Kankane - Petitioner
Versus
Union Of India Represented By The Secretary Ministry Of Finance & Ors. - Respondents
W.P.(C) 12907 of 2025 & CM APPL. 52724 of 2025
Decided On : 01-09-2025
For the Petitioner: Ms. Riya Soni and Mr. Sunil Kumar Tripathi, Advs.
For the Respondent: Ms. Anushree Narain, SSC with Mr. Naman Choula, Adv.
Startups and MSMEs must be treated preferentially by customs authorities, especially in cases involving non-prohibited goods and misdeclarations to avoid undue economic harm.
Headnote:(A) Customs Act, 1962 - Sections 46(4), 111(1), 112(a)(ii), 125(1), 17(4) - Petition for release of imported goods - Petitioner, a recognized MSME, sought release of containers detained by Customs alleging misdeclaration - Court found delay by Customs unjustified, emphasized supportive measures for MSMEs and mandated expedited release upon payment of differential duty - Demurrage charges and penalties waived at this stage. (Paras 3, 17, 21, 18)
Facts of the case:
The petitioner imported packaging materials, which underwent inspection that revealed discrepancy regarding the declared quantities. Despite admitting to misdeclarations, there were significant delays in the customs process leading to the imposition of heavy demurrage charges. (Para 5)
Findings of Court:
The Court acknowledged the legitimacy of the petitioner’s grievance regarding the delays and highlighted the need for favorable treatment for startups. Goods were to be released upon payment of differential duty only, with the waiver of other penalties. (Paras 17, 18)
Issues: The main issues included the propriety of customs procedures, the extent of penalties for misdeclaration, and the treatment of startups within the customs framework. (Paras 18, 20)
Ratio Decidendi: The court determined that while misdeclaration needs to be addressed, undue delays by Customs should not penalize compliant business practices, especially for MSMEs. The requirement for timely resolution and release of goods was mandated to foster economic growth. (Paras 18, 21)
Result: Petition granted; goods to be released within 24 hours upon payment of differential duty.
| Table of Content |
|---|
| 1. factual background of the case. (Para 2 , 3 , 4 , 5 , 10 , 11) |
| 2. court's observations on the delay and process. (Para 6 , 7 , 15 , 17 , 19 , 20 , 21) |
| 3. petitioner's grievances with customs. (Para 9 , 12 , 13 , 14 , 16) |
| 4. recognition of preferential treatment for msmes. (Para 18) |
| 5. conclusion and next steps in proceedings. (Para 22 , 23 , 24 , 25 , 26) |
JUDGMENT :
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner, a recognised startup under the Micro, Small, and Medium Enterprises (hereinafter, ‘MSME’) sector, engaged in the business of baby care products under the name ‘Fabie Baby’. The Petitioner seeks various reliefs against the Customs Department.
3. The background of the case is that the Petitioner had imported certain packaging materials for baby care products, which were loaded in Dubai and arrived at Mundra Port and further delivered to ICD Tughlakabad.
4. An alert was issued against the said containers and the same were inspected by the Customs officials. A panchnama was also prepared as per which, there were two extra cartons, which were not declared by the Petitioner. According to the Petitioner, immediately, the bill of entry was also agreed to be amended.
5. The Petitioner is stated to have repeatedly visited the Customs Department for release of the containers. However, the same have not yet been released. The containers have been in the warehouse and the Petitioner continues to incur warehousing and container handling charges, apart from the operational loss that is being borne by them. Hence, the prayer for release of containers under the bill of entry No.GSLJEATKD000393 dated 14th June, 2025 along with refund of the demurrage charges and warehousing charges and compensation has been made herein.
6. On 25th August, 2025, notice was issued in this matter and Ms. Anushree Narain, ld. SSC for the Respondent had accepted notice. Vide order dated 25th August, 2025, Ms. Narain was directed to seek instructions in the matter. On the last date, i.e. 28th August, 2025, the Court was informed that an Order-in-Original has been passed on 22nd August, 2025. The copy of the said order has been handed across today. Let the same be taken on record. The following directions have been passed in the said Order-in-Original:
“ORDER
(1) I, determine the value of the offending goods at Rs. 62,983/-, involving differential duty of Rs. 24,249/-, in respect of the goods imported vide Bill of Entry No. 3232240 dated 12.07.2025, as detailed in Table-B supra, under Rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, read with Section 14 of the Customs Act, 1962.
(ii) I order confiscation of the offending goods valued at Rs. 62,983/-, as detailed in Table-B supra, imported vide Bill of Entry No. 3232240 dated 12.07.2025, under Section 111(1) of the Customs Act, 1962. However, I give the importer an option to redeem these goods on payment of a Redemption Fine of Rs. 10,000/- (Rupees Ten Thousand only) under Section 125(1) of the Customs Act, 1962.
(iii) I also impose a penalty of Rs. 5,000/- (Rupees Five Thousand only) upon the importer under Section 112(a)(ii) of the Customs Act, 1962.
(iv) I order re-assessment of the Bill of Entry No. 3232240 dated 12.07.2025 under Section 17(4) of the Customs Act, 1962, so as to give effect to the determined value and the short-payment of duty, in accordance with the findings of this order.”
7. A perusal of the above would show that as per the Order-in-Original, the quantity of goods declared was 80,240 pieces but the actual pieces found on examination of bottle caps and some other products were 1,01,100, i.e., 20,860 excess pieces were found. The same is set out in the Order-in-Original as under:
“8.1 I note that the goods covered under Bill of Entry No. 3232240 dated 12.07.2025 were examined by the officers of SIIB on 24.07.2025, and the proceedings of such examination were duly record
