Facts of the Case

  • The Petitioner, M/s. Asian Copiers (represented by its Proprietor Mr. Akshay Khetterpal, based in New Delhi), imported a commercial consignment consisting of 120 units of second-hand multi-functional printing and copying devices (MFDs).
  • The consignment arrived under the Bill of Entry dated May 5, 2026, bearing No. 9070976, through the Inland Container Depot (ICD) located at Timmapur, Telangana.
  • On May 15, 2026, the Respondent No. 4 (Superintendent of Customs, ICD-Timmapur) issued a Seizure Memo, effectively confiscating the entire batch of 120 MFD units.
  • The primary ground for this drastic seizure by the customs department was the petitioner’s failure to produce the mandatory Directorate General of Foreign Trade (DGFT) authorization license required for importing restricted second-hand goods into India.
  • Aggrieved by the immediate confiscation and the resulting commercial standstill, the petitioner approached the High Court for the State of Telangana seeking a Writ of Mandamus to set aside the Seizure Memo and secure the release of the cargo.

Issues Involved

  • Whether the absolute confiscation of the 120 second-hand Multi-Functional Devices by the Customs authorities via the Seizure Memo dated May 15, 2026, was arbitrary, illegal, and executed without proper jurisdiction.
  • Whether the strict mandate of the Foreign Trade Policy 2023 completely bars the provisional release of restricted goods that lack a valid DGFT authorization license during import entry.
  • Whether the petitioner is entitled to an interim relief or provisional release of the electronic equipment under specific judicial conditions to minimize escalating demurrage costs and severe commercial hardship.
  • Whether the facts and legal metrics of the present petition are identical to, and thus fully covered by, the coordinate Bench's decision in W.P. No. 12697 of 2026 dated April 22, 2026.

Petitioner’s Arguments

  • The learned counsel for the petitioner, Sri Akkapeddi Srinivas, strongly contended that the action taken by the Superintendent of Customs in completely freezing and confiscating the consignment was highly arbitrary, unjust, and contrary to the spirit of the Foreign Trade Policy.
  • It was argued that keeping the goods indefinitely under detention would subject the petitioner to exorbitant, ruinous demurrage charges and irreparable financial loss, effectively crippling their ongoing business operations.
  • Crucially, the petitioner's counsel submitted to the Bench that the entire legal controversy at hand was squarely and textually covered by an earlier judgment passed by the Division Bench of the Telangana High Court on April 22, 2026, in the case of W.P. No. 12697 of 2026.
  • Based on the principle of judicial consistency, the petitioner prayed that an identical order for provisional release should be extended to their consignment under similar terms.

Respondent’s Arguments

  • The respondents were represented by Sri N. Bhujanga Rao, learned Deputy Solicitor General of India (for Respondent No. 1), and M/s. Dominic Fernandes, Standing Counsel for the Central Board of Indirect Taxes and Customs (CBIC) (for Respondents No. 2 to 4).
  • The core stance of the customs department initially rested on the fact that the second-hand electronic printing devices could not legally clear customs without the specific, mandatory import license provided by the DGFT.
  • However, when the matter was formally taken up for hearing and the petitioner highlighted the controlling precedent, the learned Deputy Solicitor General of India did not dispute or contest the submission that the present case was entirely covered by the Court’s previous ruling in W.P. No. 12697 of 2026.

Court Order / Findings

The Division Bench comprising the Honourable Sri Justice Nagesh Bheemapaka and the Honourable Sri Justice Vakiti Ramakrishna Reddy reviewed the records and passed the following definitive directions:

  • Adoption of Precedent: The High Court observed that the matter is identical to W.P. No. 12697 of 2026 (decided on April 22, 2026) and allowed the writ petition on identical terms without any order as to costs.
  • Provisional Release Order: The customs authorities were directed to pass an order on the application for the provisional release of the 120 MFD units, subject to stringent conditions.
  • Payment of Enhanced Duty: The petitioner must pay/deposit the enhanced duty amount. The Customs department must complete the quantification of this duty within one (01) week from receiving the order copy, and the petitioner must make immediate payment upon receiving the quantification.
  • Release Timeline: Upon receipt of the entire enhanced duty payment, the customs authorities must release the goods within an absolute outer limit of four (04) weeks.
  • Bank Guarantee Requirement: In addition to the enhanced duty, the petitioner is mandated to provide a bank guarantee worth 10 percent of the total price of the imported second-hand goods.
  • Transaction Record Maintenance: Upon provisional release, if the petitioner sells or supplies these devices to customers, they must rigidly maintain comprehensive details of the buyers, transaction prices, and related invoices, and make this data available to the customs authorities from time to time.

Important Clarification

  • Uninfluenced Adjudication: The High Court explicitly clarified that the order for conditional provisional release is purely an interim arrangement to mitigate commercial hardship and will not stand in the way of the Customs Department proceeding with regular adjudication in the manner known to law.
  • The adjudicating authority must decide the main tax and import dispute independently, based on the merits, objections, and contentions raised by both sides, completely uninfluenced by this conditional release order.
  • Demurrage Waiver Clause: Regarding the petitioner's request for a waiver of the accumulated demurrage charges, the Court clarified that if the petitioner files a formal application seeking such a waiver, the respondents must consider and decide the application objectively.

Section Involved

  • Article 226 of the Constitution of India: Invoked by the petitioner to seek a Writ of Mandamus against the arbitrary and illegal seizure memo issued by the customs authorities.
  • Section 151 of the Code of Civil Procedure (CPC): Filed under I.A. No. 1 of 2026 seeking interim directions for the immediate provisional release of the imported goods to prevent irreparable loss.
  • Foreign Trade Policy 2023: Regulations governing the restrictions and licensing protocols regarding the importation of second-hand electronic items and goods.
  • Provisional Release Framework (Customs Act, 1962): While not explicitly numbered in the order, the underlying matter deals with the legal framework governing the provisional release of seized import consignments pending formal adjudication.

Link to download the order - https://mytaxexpert.co.in/uploads/1783068494_459compressed.pdf

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