Rule 2(a) of the General Rules for Interpretation of Customs Tariff cannot be applied to interpret Foreign Trade Policy conditions, and Circulars restricting the statutory power of provisional release under Section 110A of the Customs Act are ultra vires the Act.

FINAL ORDER NOS. A/85562-85563/2026

Date of Hearing: 07.04.2026

Date of Decision: 21.04.2026

PER: DR. SUVENDU KUMAR PATI

Rejection of request made to the Commissioner of Customs, JNCH, NS-V, for provisional release of Drones and its components/parts seized from appellants‟ premises on 05.02.2025, 11.02.2026 and on dated. 20.02.2025 after presentation of Bill of Entry for clearance is assailed before this Tribunal with a request for direction for such provisional release.

2. Facts of the case would go to reveal that appellant M/s. IZI Ventures Pvt. Ltd., of Bhopal had imported goods by declaring those as “Drone parts and Components” covered under Bill of Entry No. 7724157 dated 10.01.2025 which, upon examination by Dock officer, was found to be parts of complete Drone being imported in complete Knocked-down /semi-knocked down condition (CKD/SKD) so as to make the drone complete after clearance from Customs in violation of DGFT Notification NO. 54/2015-20 dated 09.02.2022 that prohibits import of drones by Non-Government concern in completely built-up condition (CBU) or SKD/CKD Conditions and only parts/components of Drone are meant for free importation. On the basis of Dock officer‟s report, preliminary investigation was conducted by the Special Intelligence and Investigation Branch (SIIB), who noticed that importer had filed eight Bills of Entries at different CFS locations, out of which seven were given out of charge (OCC) and goods have been removed from Customs area. Further enquiry revealed that both appellants‟ are controlled by same person named Ishan Haydn as the Director of the Private Limited Firm that imported certain spares/ components while the other being a proprietorship firm imported the remaining spares/components in CKD/SKD condition so as to make the drone complete. Those goods were accordingly seized under proper Seizure Memo and appellants sought for its release after intervention of Hon‟ble High Court directing the Commissioner to pass an order for provisional release. The order for such release had gone against the appellants, who are before us for necessary relief.

3. During course of hearing of the appeal Ld. Counsel for the appellant Mr. Ashwini Kumar submitted that Respondent Department had applied Rule 2(a) of the General Rules for Interpretation of Customs Tariff to hold the parts/components as complete articles namely Drones, as imported items collectively possess essential characteristics of finished articles and applied prohibition contained in Notification No. 54/2015-22 that prohibits the same from being imported but such a finding is contrary to the judicial pronouncement made at this Tribunal‟s level in the case of LML Limited Vs. Commissioner of Customs reported in [1999 (105) E.L.T. 718 (Tribunal)],against which the Department had preferred Civil appeal before the Hon‟ble Supreme Court that was dismissed, as could be noticed from the order reported in [1999(107)ELTA-119] and the said precedent decision, that attained finality with dismissal of Department‟s appeal, was followed subsequently in series of cases including K.R. Trading Company Vs. Collector of Customs, Kolkata, reported in [1999(110) ELT 746 (TRI), Wipro Limited Vs. Commissioner of Customs, Chennai reported in 1999(107) E.L.T. 398 (Tribunal)] as well as in Elsimate Electronics