Legal principle

Goods seized on a mere suspicion of prohibition must be released on indemnity when tests do not support customs and the prohibiting notification is not shown. Whether the Section 110(2) six month clock runs from detention or seizure is unsettled in the Madras High Court and has been referred to a Larger Bench.

Court decision

The Division Bench confirmed the order to release the goods at once on the importer giving sufficient indemnity, with adjudication to continue under law. The later extension order dated 31.08.2026 was held infructuous and W.A. No. 2944 of 2026 was dismissed. On whether six months runs from detention or seizure, the court found two conflicting Division Bench rulings and referred the question to the Chief Justice for a possible Larger Bench.

Facts

S.R. Rajarajendiran (Asia Gate Exims) imported 500 bags of "Agricultural Rejected Nut Pieces, Residue and Waste", said to be cattle feed unfit for human consumption. After an NCTC alert that such goods were sometimes cashew kernels, customs detained the consignment on 24.10.2025 and sent samples for testing. Three test reports showed the goods were not fit for human consumption. A seizure memo was issued on 01.01.2026 and the seizure was extended on 19.06.2026 under the proviso to Section 110(2). A single judge quashed the extension, counting six months from detention, and ordered release on indemnity. Customs appealed to a Division Bench of the Madras High Court.

Key provisions

• Section 110(2), Customs Act, 1962 — Seizure of goods, documents and things