Property developer Suresh Raheja, arrested by the Air Intelligence Unit on charges of customs duty evasion, was granted bail on Thursday.
Additional Chief Metropolitan Magistrate S S Shirke granted bail on personal bond of Rs 1 lakh.
The magistrate also ordered him to appear in the AIU office everyday from Monday to Friday for five hours for interrogation.
Raheja, who was returning from London, was arrested on Wednesday night at the Mumbai International Airport.
He was found carrying jewellery and watches worth Rs 20 lakh and was held for evading payment of customs duty, sources said.
The prosecution sought seven days' police custody for Raheja and asked for permission to impound his passport. They argued that AIU was still to complete the valuation of the goods.
However, Raheja's lawyer Satish Maneshinde argued that there was no need to arrest Raheja and assured that he would cooperate in the investigation.
Raheja, later, submitted a demand draft of Rs 5 lakh towards custom duty and also furnished an undertaking saying he would pay the balance amount in case the goods are priced at a higher value.
Maneshinde said Raheja had gone to London for a property exhibition and had taken £ 24,000 through official channels.
He alleged that Raheja was arrested despite his willingness to pay the duty.