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Informist, Tuesday, Sept. 2, 2025

 

NEW DELHI – The Delhi High Court has asked the Central Board of Indirect Taxes and Customs and the Commissioner of Customs to consider whether some preferential treatment ought to be given to start-ups and micro, small and medium enterprises in terms of timelines, warehousing and provisional release of confiscated goods, especially in the case of low-value consignments. The high court asked the CBIC and the Commissioner of Customs to file affidavits in this regard by the next date of hearing on Oct. 28.

 

A perusal of Section 110 of the Customs Act, 1962 would show the timeline prescribed in it is six months, plus an additional six months, the high court said. The said timeline would be too long in cases involving small businesses, especially when there are no prohibited goods involved, the court said. The high court was hearing a petition by Mitraj Business Pvt. Ltd., a recognised start-up under the micro, small, and medium enterprises sector, which is engaged in the business of baby care products under the name 'Fabie Baby'.

 

It is a matter of public knowledge that in the case of start-ups and micro, small and medium enterprises in various areas of executive administration, they are given some preferential treatment so that their businesses are encouraged, the high court said. Considering the prevailing policy in India to encourage start-ups and micro, small and medium enterprises, the customs department also needs to be sensitised to ensure that such parties are given some consideration, especially when the goods are not prohibited, it said.

 

The high court directed that the goods of the petitioner, Mitraj Business, be released upon payment of differential duty in terms of the customs department's order-in-original. The petitioner is not liable to pay the redemption fine as also the penalty at this stage, said the court. However, the petitioner would be required to pay a differential duty of INR 24,249. After the said payment is done, the goods of the petitioner should be released by the customs department within 24 hours, said the court. 

 

In this case, as reflected in the department's portal, the petitioner had accepted the proposed classification of the customs department, said the court. Thereafter, it took the customs department almost one month to pass the order-in-original, said the court, adding that the delay was completely inexplicable.

 

The case has its genesis in the petitioner importing certain packaging materials for baby care products, which were loaded in Dubai, arrived at Mundra Port in Gujarat and were further delivered to ICD Tughlakabad in Delhi. Thereafter, an alert was issued against the goods and the same were inspected by the customs officials. A 'panchnama' was also prepared, according to which, there were two extra cartons which were not declared by the petitioner. According to the petitioner, the bill of entry was also agreed to be amended immediately. The petitioner is stated to have repeatedly visited the customs department for the release of the goods. However, these have not been released yet. Containers have been in the warehouse and Mitraj Business continues to incur warehousing and container handling charges, apart from facing an operational loss, it said. Hence, the petitioner moved the court seeking the release of containers along with a refund of the demurrage charges and warehousing charges.  End 

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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