No Seizure Memo for Over Two Months—This Position Is Completely Unacceptable: Delhi High Court Raps Customs Over Arbitrary Detention of Export Goods

There can be no justification to hold up export consignments for long periods unless the goods are prohibited – In a sharp rebuke to customs officials, the Delhi High Court directed the Customs Department to provisionally release goods detained since 13th January 2025 without any formal seizure memo or justification. The Court held that such prolonged detention was “completely unacceptable,” especially when the authorities had failed to draw a seizure memo or panchanama for over two months.

Justice Prathiba M. Singh, delivering the oral judgment along with Justice Rajneesh Kumar Gupta, observed that “genuine exports must be facilitated and there should be no delays or hold ups of export goods,” reiterating that administrative delay cannot be used as a tool to paralyze trade.

The petitioner, Backbone Overseas, approached the Court under Article 226, seeking the release of a consignment of ladies PVC slippers valued at ₹9,29,145.60 that had been detained by the Customs Department at the Foreign Post Office, New Delhi. Despite several representations to the Commissioner of Customs, no reasons for detention were conveyed, and no seizure memo was issued until 25th March 2025, the day before the High Court hearing.

The petitioner’s counsel argued that this delay was contrary to repeated instructions by the Central Board of Excise and Customs (CBIC), particularly Circular No. 30/2013, which warns against wrongful detention of export goods and mandates that any such detention beyond three days be reported to the Commissioner.

The Court minced no words in expressing its disapproval. Justice Singh observed, “Since 13th January, 2025, no seizure memo has been drawn as well as no Panchanama has also been drawn by the authorities.” The Bench found that the Customs Department had taken no concrete steps until the writ petition was filed. It was only after court notice that a seizure memo was hurriedly issued on 25th March.

On being confronted with this timeline, the Customs Officer present in Court submitted that the department suspected the consignment to be overvalued to claim fraudulent duty drawback. While acknowledging the department’s right to investigate, the Court was categorical: “If the said apprehension exists on behalf of the Customs Department, then suitable steps would have to be taken… but the consignment cannot be held up in this manner.”

The Court took particular note of CBIC’s Circular No. 01/2011 and its reaffirmation in Circular No. 30/2013, both of which mandate that export consignments detained for investigation must be released provisionally upon furnishing of a bond and security.

Citing the 2013 circular, the Court quoted, “There can be no justification to hold up export consignments for long periods unless the export goods are prohibited under Customs Act, 1962 or ITC (HS) Policy.” It also highlighted that the Customs Board had clearly directed that such delays must be reported to the Commissioner and treated as a serious lapse.

The Bench further noted that the petitioner had submitted written communications to the Customs Department on 20th January and 12th March 2025, but received no response. “It becomes clear to the Court,” the judgment states, “that the Customs Department is taking steps only after filing of the present writ petition.”

On the eve of the hearing, the Customs Department issued summons under Section 108 of the Customs Act, seeking various documents including purchase invoices, foreign buyer contracts, transaction records, and GSTR filings. The petitioner agreed to appear before the authorities on 27th March 2025 with the requested documents.

However, the Court noted that these actions seemed reactionary. “The delay in this manner would not be permissible as consignments of the Petitioner and other similarly placed persons are held up, when expedited steps are not taken for clearing of goods,” it said.

Ordering swift action, the Court directed: “Within a period of seven days, the Customs Department shall take a decision in this matter and provisionally release the goods, subject to any reasonable conditions that it deems appropriate on facts.”

The High Court concluded that the delay in issuance of seizure memo and panchanama, and the prolonged detention without any legal basis, were in complete violation of CBIC’s own instructions and fair trade principles. The judgment sends a strong message that investigative caution must not convert into commercial disruption.

Date of Decision: 26 March 2025