Facts of the Case

  • The Consignment: The Petitioner, M/s. Excel Copiers (represented by its partner Mr. Gaurav Khetterpal), imported a consignment consisting of 119 units of second-hand multi-functional printing and copying devices (MFDs).
  • The Bill of Entry: The subject goods arrived and were declared via Bill of Entry No. 8899122 dated April 25, 2026.
  • The Seizure: On May 16, 2026, the Respondent No. 4 (Superintendent of Customs, Inland Container Depot, Sanathnagar) issued a Seizure Memo, effectively confiscating the entire shipment of 119 units.
  • The Ground of Confiscation: The primary ground invoked by the Customs authorities for the seizure was that the Petitioner failed to produce the requisite Directorate General of Foreign Trade (DGFT) authorization/license, which is mandated for the import of restricted second-hand goods under the prevailing trade policy.
  • Constitutional Challenge: Aggrieved by the absolute detention and confiscation of the commercial consignment, the Petitioner approached the High Court of Telangana under Article 226 of the Constitution of India, seeking a Writ of Mandamus to quash the Seizure Memo as being arbitrary and without jurisdiction.

Issues Involved

  1. Whether the absolute seizure and confiscation of 119 units of second-hand Multi-Functional Devices (MFDs) by the Customs authorities solely for want of a DGFT authorization was legally sustainable, arbitrary, or contrary to the Foreign Trade Policy 2023.
  2. Whether the Petitioner was entitled to the provisional release of the restricted second-hand electronic items pending final adjudication, and if so, what appropriate balancing conditions should be imposed to safeguard revenue interests.
  3. Whether the facts and legal questions of the present case were completely aligned with and covered by the earlier Division Bench order dated April 22, 2026, passed in Writ Petition No. 12635 of 2026.

Petitioner’s Arguments

  • Judicial Precedent and Consistency: The learned counsel for the petitioner, Sri. Akkapeddi Srinivas, strongly argued that the controversy surrounding the provisional release of these specific second-hand Multi-Functional Devices was no longer res integra. He submitted that the matter was squarely and identically covered by the judgment and order dated April 22, 2026, passed by a Division Bench of the Telangana High Court in W.P. No. 12635 of 2026.
  • Arbitrary Withholding: It was contended that keeping the goods under absolute detention indefinitely causes immense financial hardship, business disruption, and results in the accumulation of heavy demurrage charges.
  • Prayer for Parity: The Petitioner prayed that on the grounds of legal parity and judicial discipline, a similar order allowing provisional release under reasonable, structured safeguards ought to be extended to them.

Respondent’s Arguments

  • Non-Compliance with Import Norms: The respondents, represented by the learned Deputy Solicitor General of India, Sri. N. Bhujanga Rao, initially maintained that the import of second-hand multi-functional devices without a valid DGFT authorization constitutes a violation of the Foreign Trade Policy 2023, thereby validating the issuance of the Seizure Memo.
  • Concession on Precedent alignment: However, when confronted with the law previously laid down by the High Court, the learned Deputy Solicitor General of India did not dispute the factual or legal submission made by the Petitioner's counsel. He conceded that the operational matrix of the current Writ Petition was indeed identical to and covered by the earlier ruling in W.P. No. 12635 of 2026.

Court Order / Findings

The Division Bench comprising Hon’ble Sri Justice Nagesh Bheemapaka and Hon’ble Sri Justice Vakiti Ramakrishna Reddy noted the mutual consensus regarding the applicability of the precedent and allowed the Writ Petition in identical terms. The Court directed the provisional release of the goods subject to the following stringent operational conditions:

  • Quantification of Duty: The Customs Department must immediately quantify the enhanced duty amount within an outer limit of one (01) week from the date of receipt of the court order copy.
  • Payment & Release Timeline: Upon receiving the quantification, the Petitioner is required to deposit the enhanced duty immediately. On receipt of the entirety of the payment, the authorities must release the goods within four (04) weeks.
  • Bank Guarantee: In addition to the enhanced duty deposit, the Petitioner must furnish a Bank Guarantee worth 10 percent of the total declared value/price of the imported electronic items.
  • Transaction Tracking: If the Petitioner sells or supplies these provisionally released goods to their customers, they must meticulously maintain details of the customers, transactional prices, and sales logs, and make this data available to the Customs authorities regularly.
  • Adjudication Unaffected: The Court explicitly clarified that this provisional release is an interim measure and will not impede the Customs Department from proceeding with formal adjudication proceedings in accordance with the law.
  • Demurrage Waiver Consideration: If the Petitioner submits an application seeking a waiver of accumulated demurrage charges, the respondents are mandated to evaluate and decide upon such application objectively.

Important Clarification

  • Independent Final Adjudication: The High Court issued an important directive clarifying that the adjudicating authority, while conducting final statutory proceedings under the Customs framework, must remain completely uninfluenced by this order of conditional provisional release. The final order must be passed purely on merits, taking into objective account the individual contentions, statutory violations, and defenses raised by both sides.

Sections Involved

  • Article 226 of the Constitution of India: Invoked to seek extraordinary writ jurisdiction (Writ of Mandamus) against the arbitrary and extra-jurisdictional seizure memo executed by public officers.
  • Section 151 of the Code of Civil Procedure (CPC), 1908: Invoked via Interlocutory Application (I.A. No. 1 of 2026) praying for the exercise of inherent powers to grant immediate provisional relief to prevent irreparable economic loss.
  • Foreign Trade Policy 2023 (FTP): The substantive regulatory policy under which the restriction on second-hand digital copying/printing equipment is governed and under which the lack of a DGFT authorization was flagged.
  • Provisional Release Framework (Customs Act): Evaluated implicitly within the operational parameters laid down by the court to balance revenue collection via enhanced duty/bank guarantees against absolute goods detention.

Link to download the order - https://mytaxexpert.co.in/uploads/1783069572_467compressed.pdf

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