For EXE ( Type 2 ) custom actions, just setup the filename and command line in InstallShield:
Example:
WorkingDirectory:INSTALLDIR
FileName & Command Line: CMD /C "MYBAT.BAT RED BLUE"
then in side the bat file %1 will = RED and %2 will = BLUE. Careful to escape arguments that have spaces.
As an aside, you might want to consider if there is a better way then calling a batch file to do what you need. For example I often see people write batch files that run "net start myservice" instead of properly authoring the ServiceControl table.