DGFT classification binds Customs; provisional release conditions modifiable with bond and solvency certificate.

ORDER

The present writ petition is filed challenging the impugned order whereby considering the petitioner's request for provisional release of the seized goods covered under Bill of Entry No.6054823 dated 02.12.2025 filed by the petitioner viz., a) Bond for full value of goods b) Bank guarantee covering differential duty amount along with 35% of adjudication liability which according to the petitioner works out to around Rs.14.90 crores. It is against the above impugned order that the present writ petition has been filed.

2. Brief facts:

2.1. Petitioner would submit that they were granted import license under EPCG Scheme (Duty Free Import) for import of capital goods under ITCHS (Indian Tariff Code-Harmonised System) Code : 84794000. Petitioner imported Tube Mill Laser Welding Machine Line-1 Set from Hefei Mantai Machinery Technology Co. Ltd., China. The overseas supplier classified the product as falling under ITCHS Code:84794000. The shipment of the said machinery was covered by an invoice, certificate of origin and bill of ladding. It is submitted that all these documents showed that import was covered under HS Code 84794000. Petitioner filed its Bill of Entry No.6054823 on 02.12.2025 classifying the product as falling under ITCHS Code: 84794000, showing duty as NIL in terms of EPCG Scheme. On 02.02.2026, it was submitted that the 3rd respondent seized the machinery on the premise that the imported machinery was not classifiable under CTH 84794000 instead it would fall under CTH 85158090, thus liable to Anti-Dumping Duty in terms of Notification No.15/2023-Cus.(ADD) dated 22.12.2023. It was further submitted that these are not goods which are covered under the EPCG license.

2.2. Against this background, petitioner filed provisional release of the consignment while offering a bank guarantee of US$10500 as security, which according to the petitioner represented the disputed portion relatable to the laser-assisted sealing component. This, the petitioner would submit that he was compelled inasmuch as the continued detention of the imported machinery has an adverse impact on production. Learned counsel for petitioner would also submit that petitioner has been in this business since 1990 and there has not been any imports in the past which has been the subject matter of litigation.

3. The challenge in the present writ petition is to the conditions imposed in the impugned order for provisional release viz., a) Bond for full value of goods b) Bank guarantee covering differential duty amount along with 35% of adjudication liability which according to the petitioner works out to around Rs.14.90 crores.

3.1. According to the petitioner the above conditions are onerous, he would place reliance on the judgment of the Supreme Court in Titan Medical Systems (P) Ltd., vs. Collector of Customs, New Delhi reported in (2003) 9 SCC 133 and the decision of the Division Bench of this Court in M/s.Adyar Gate Hotel Ltd., and another vs. The Commissioner of Customs and others in C.M.A.Nos.71 & 131 of 2025 dated 03.06.2025 wherein the Supreme Court and the Division Bench of this Court following the Supreme Court had held that once the classification is adopted in respect of goods by DGFT, it may not be permissible for the Customs authory to take a different view. Learned counsel for petitioner would also submit that seizure and continued detention for more than 5 months is clearly arbitrary.

4. To the contrary, learned counsel for respondents would submit that while there may not be any dispute over the proposition that the classification adopted by DGFT cannot be discarded / disregarded by the Customs Authority as such, h