The Deputy Commissioner of Customs v. S.R. Rajarajendiran

What happened

The importer, a proprietor trading as Asia Gate Exims, filed a bill of entry on 14 October 2025 for 500 bags of Agricultural Rejected Nut Pieces, Residue and Waste, which it says is cattle feed unfit for human consumption. On an alert issued on 22 October 2025 by the National Customs Targeting Centre, which noted that in similar consignments testing by a cashew research directorate had found the goods to be cashew kernels, whose import is free only if the CIF value is above ₹680 a kg, the customs authorities detained the consignment on 24 October 2025 and sent samples for testing. A test of 26 September 2025 by a Ho Chi Minh City laboratory found the goods unfit for human consumption, a report of 12 December 2025 of the Referral Food Laboratory, Mysuru found that the sample, being broken cashew bits, did not conform because the acidity of its extracted fat exceeded the limit, and a report of 30 January 2026 of the Central Revenue Control Laboratory, New Delhi found the parameters within the limits for compounded cattle feed under IS 2052:2023 while saying that fitness for human consumption could not be determined as the exact identity was unknown. A seizure memo was issued on 1 January 2026 and was extended on 19 June 2026 under the proviso to section 110(2) of the Customs Act, 1962. The importer filed W.P. No. 2050 of 2026 against the seizure memo, W.P. No. 23278 of 2026 for release and W.P. No. 24543 of 2026 against the extension, and by a common order of 27 July 2026 the Writ Court allowed the last, quashing the extension on the footing that it should have been made within six months of detention, 24 October 2025, and not seizure, directed return of the goods on indemnity and left the authorities free to adjudicate under section 28. The authorities appealed against the release direction and the conclusion on the date, and while the appeals were pending issued another extension order on 31 August 2026.

Questions before the court

• Can Customs treat imported goods declared as cattle feed as prohibited on the basis of an alert and the low price, and from which date does the six-month period to extend a seizure under the proviso to section 110(2) run?

Why the court ruled this way

The Court did not agree that the authorities' contention that cattle feed of this kind has been diverted to units making preparations for human consumption was a matter that could be inquired into at this stage or was an appropriate basis for detention or seizure (paragraph 10). The argument that the declared price of ₹90 a kg, far below ₹680 a kg for cashew kernels for human consumption, made the goods prohibited failed because no notification was produced despite the Court's asking for it, and one test report found the goods to be cattle feed unfit for human consumption and two reports found that they did not meet the standards for human consumption, so the argument that the goods are prohibited was baseless at this stage (paragraphs 11–12). The importer had produced a purchase order of 19 October 2025 from a milk producers' cooperative society for 50 kg of cattle feed, so prima facie the import was for cattle feed (paragraph 13). The Court confirmed the release of the goods on sufficient indemnity with adjudication to continue, held the extension order of 31 August 2026 infructuous in light of that order, and dismissed W.A. No. 2944 of 2026 (paragraphs 14–15).

On the legal question in W.A. Nos. 2931 and 2939 of 2026, section 110(2) requires a notice under section 124(a) within six months of the seizure, failing which the goods are returned, and the proviso allows an extension of up to six months by the Commissioner for reasons recorded, so the question is whether the period runs from detention or seizure, which matters because the extension of 19 June 2026 is in time from 1 January 2026 but not from 24 October 2025 (paragraphs 16–18). Two Division Benches have taken conflicting views: ALM Enterprises v. Commissioner of Customs held that the date of seizure is relevant, goods in the custody of the customs officer until cleared not being seized by mere denial of access, whereas K. Steamship Agencies v. Balaji Dekors said that once goods are not cleared they are deemed seized and detention is synonymous with seizure, and the earlier decision was not cited before the later Bench (paragraphs 19–21). The Court directed the Registry to place the question before the Chief Justice for constitution of a larger bench (paragraph 22).

Controlling point

Suspected diversion of cattle feed to human use and a low declared price, without a notification of a minimum price and with laboratory reports finding the goods unfit for human consumption, are no basis for treating the goods as prohibited, and the goods are to be released on sufficient indemnity pending adjudication, while the date from which the extension period under the proviso to section 110(2) runs is referred to a larger bench.

Order and next steps

The Court confirmed the Writ Court's order and directed the authorities to release the goods forthwith on the importer furnishing sufficient indemnity, with adjudication to continue in accordance with law, held the extension order of 31 August 2026 infructuous, dismissed W.A. No. 2944 of 2026 and the connected petition without costs, and directed the Registry to place before the Chief Justice the question whether, for reckoning the validity of an extension of six months under the proviso to section 110(2), the relevant date is the date of detention or the date of seizure.

Practical implications

An importer of goods declared as cattle feed should keep the test reports and documents showing the end use, an officer relying on an alert should be ready to produce the notification or other basis for treating goods as prohibited, and a party contesting an extension of seizure should look at the date of detention as well as seizure until the larger bench decides.

Limits of this ruling

• The Court did not decide the true nature of the goods or the adjudication under section 28, which continues, and it did not decide from which date the extension period runs, which it referred for decision by a larger bench. Its findings on the goods are made at the stage of detention and seizure.