Case Details: Mitraj Business Pvt. Ltd. vs. Union of India (2025) 34 Centax 171 (Del.)
Judiciary and Counsel Details
- Prathiba M. Singh & Shail Jain, JJ.
- Ms Riya Soni & Shri Sunil Kumar Tripathi, Advs., for the Petitioner
- Ms Anushree Narain, SSC with Shri Naman Choula, Adv., for the Respondent
Facts of the Case
The petitioners, being start-ups and MSMEs engaged in the import of caps and bottles for cosmetic products, faced seizure of consignments on the allegation of misclassification and misdeclaration of weight and quantity in the bill of entry. On physical examination, the goods were found in excess as compared to declarations, which were inconsistent with the invoice and packing list. The petitioners at the time of examination accepted the discrepancies, agreed to pay applicable duty with penalty as per the classification proposed by the Department, and repeatedly approached the Department for the release of the containers. However, despite being aware that the petitioners were incurring heavy demurrage charges, the Department did not release the goods and took almost one month to pass the adjudication order. During the pendency of the petition, the Department informed the Court that the adjudication order had been passed confiscating goods, demanding duty, and imposing a fine and penalty. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the Department, despite knowledge that the petitioners, who were start-ups and MSMEs, were incurring demurrage charges and had agreed to the classification proposed at the time of examination, had caused an unexplained delay in passing the adjudication order. The Court observed that such delay was completely inexplicable and that not all misdeclarations could be treated similarly, since the nature of goods and the extent of misdeclaration required due consideration. It was emphasised that the imported goods were neither prohibited nor damaging and that prevailing government policy envisaged encouragement of start-ups and MSMEs. The Court therefore directed the Department to release the goods upon payment of differential duty only in terms of the adjudication order within 24 hours, while issues of redemption fine, penalty, compensation, and waiver of demurrage charges were to be considered after completion of pleadings.
