DRI Mumbai Seizes 132 Containers of Smuggled Watermelon Seeds and Green Peas Worth ₹139 Crore; Importer Arrested

A significant crackdown on Customs import misdeclaration penalties has been initiated by the Directorate of Revenue Intelligence (DRI) in Mumbai, uncovering a large-scale smuggling operation at Nhava Sheva Port. Acting on specific intelligence, DRI officers intercepted 132 containers, revealing a deliberate attempt to circumvent import restrictions on agricultural commodities. The consignments, initially declared as 'Toor Dal/Pigeon Peas', were found to contain 2,710 metric tonnes (MT) of watermelon seeds from Tanzania and Sudan, and 319 MT of green peas from Canada, totaling approximately 3,029 MT of goods. The estimated value of the seized goods stands at a staggering ₹139 crore. This sophisticated modus operandi involved misdeclaration to bypass stringent government regulations. Import of melon seeds has been restricted or prohibited since June 2024 under DGFT Notification No. 05/2023 dated April 5, 2024. Similarly, green peas imports are regulated by DGFT Notification No. 37/2015–20 dated December 18, 2019, which mandates a Minimum Import Price (MIP) of ₹200 per kg (CIF) and restricts imports exclusively through Kolkata Port. The proprietor of the importing firm, identified as a key orchestrator of this organized smuggling, was arrested on April 19, 2026. This incident underscores the heightened scrutiny by authorities on import compliance, with severe consequences for entities attempting to evade duties or bypass restrictions, potentially impacting their Input Tax Credit (ITC) eligibility and inviting prosecution under relevant sections of the Customs Act.

The seizure triggers provisions under the Customs Act, 1962, particularly Section 111, which deals with the confiscation of improperly imported goods, including those imported contrary to any prohibition or restriction. Misdeclaration also attracts penalties under Section 112 for improper importation and Section 114AA for using false and fabricated records. Non-compliance can lead to confiscation of goods, imposition of fines, and potential prosecution of the importer, with property vesting in the Central Government upon confiscation under Section 126.

This incident sets a clear precedent for aggressive enforcement against import policy violations, moving beyond mere duty evasion to include circumvention of trade restrictions. Tax litigators should anticipate increased scrutiny on Bill of Entry declarations and valuation, potentially leading to more provisional attachments and arrests under Section 69 of the CGST Act if related ITC claims are suspected. CFOs must proactively review their supply chain compliance, especially for restricted items, to mitigate significant financial and reputational risks.

CFOs and CAs must ensure robust internal controls for import declarations to avoid severe penalties and potential criminal prosecution. This case highlights the risks of non-compliance with DGFT notifications and Customs regulations.