2026-VIL-874-MAD-CU
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CUSTOMS High Court Cases

Customs – Duty Free Import Authorisation Scheme – Entitlement of wheat gluten to exemption from Basic Customs Duty as wheat flour – Petitioner imported Vital Wheat Gluten claiming exemption from BCD under DFIA Scheme on the basis of authorisation permitting duty-free import of wheat flour – Seizure memo was issued on the ground that wheat gluten is commercially and technically distinct from wheat flour and therefore not entitled to the benefit of exemption – Whether wheat gluten is covered by the expression wheat flour for the purposes of the DFIA Scheme and whether seizure memo based on suspended Public Notice is sustainable – HELD – Wheat gluten is wheat flour with specific technical characteristics and qualifies for exemption under the DFIA Scheme. This issue had already been examined by the CESTAT which held that wheat gluten is nothing but wheat flour having specific technical characteristics and therefore is entitled to the benefit available under the DFIA Scheme. A Coordinate Bench of this Court concluded that wheat flour and wheat gluten fall under the same description for the purpose of the DFIA Scheme. These decisions have attained finality - The principal basis for issuing the impugned seizure memo is the Public Notice dated 02.11.2016 which had been suspended on 26.08.2025 prior to the import. Once the public notice stands suspended, it ceases to operate prospectively - The Circular dated 24.07.2025 clarifies that no technical correlation is required to establish between imported goods and export product in cases like the present one. The power of seizure can be exercised only when the proper officer has reason to believe that the goods are liable to confiscation and such belief must be based on relevant and legally sustainable material. It cannot be founded on material which has ceased to have legal force or which is contrary to binding judicial decisions. The respondents had no legally sustainable material before them to form the requisite reason to believe that the imported goods were liable to confiscation – The impugned seizure memo is quashed and the bank guarantee furnished by the petitioner is directed to be discharged – The writ petition is allowed
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