2022 (6) TMI 1342 - HC - Customs

Court modifies release conditions for seized Range Rover over duty evasion, imposes deposit, bank guarantee, bond, and restriction.

The Court modified the conditions of release for a Range Rover car seized due to duty evasion, requiring the petitioner to deposit 50% of the maximum duty ... Provisional release of goods under the Customs Act, 1962 (Section 110A) - Deposit of differential duty as condition for provisional release - Bank guarantee and security for provisional release - Execution of bond and undertaking for payment of adjudged duty, fine or penalty - Undertaking against alienation or encumbrance pending adjudication - Judicial modification of conditions of provisional releaseProvisional release of goods under the Customs Act, 1962 (Section 110A) - Deposit of differential duty as condition for provisional release - Bank guarantee and security for provisional release - Execution of bond and undertaking for payment of adjudged duty, fine or penalty - Undertaking against alienation or encumbrance pending adjudication - Judicial modification of conditions of provisional release - Validity and reasonableness of the conditions imposed in the provisional release order of the seized vehicle and modification of those conditions. - HELD THAT: - The petitioner confined challenge to the terms of the provisional release order issued under Section 110A of the Customs Act, 1962. The respondents asserted that differential duty of Rs.60,13,920/- had escaped and that the conditions in the release order were lawful. The High Court accepted that some security was warranted but found the original terms (full payment of differential duty, a bond and a large bank guarantee) required moderation. Applying a reasonableness standard, the Court directed that the beneficial owner deposit 50% of the differential duty and furnish a bank guarantee for the remaining 50%, to be kept valid until final adjudication (with provision for appropriation on non-renewal as prescribed in Circular No.35/2017-Customs). The Court retained the requirement of executing a bond undertaking payment of any duty, fine or penalty adjudged and expressly required that the vehicle not be alienated or encumbered pending adjudication. The order of provisional release was accordingly modified to reflect these terms and the writ petition was disposed of.Original conditions of provisional release modified: 50% deposit of differential duty, bank guarantee for the remaining 50%, execution of bond undertaking payment of adjudged amounts, and prohibition on alienation or encumbrance until adjudication; writ petition disposed.Final Conclusion: The High Court modified the provisional release conditions imposed under Section 110A of the Customs Act, 1962 by directing payment of 50% of the differential duty, furnishing a bank guarantee for the balance, executing a bond undertaking payment of any adjudged amounts, and prohibiting alienation of the vehicle pending adjudication; the writ petition was disposed accordingly. Issues:1. Duty evasion and seizure of a Range Rover car.2. Petitioner's claim for release of the seized car.3. Challenge to the terms of the provisional release order.4. Dispute over the conditions imposed for the release of the car.Analysis:1. The judgment revolves around the evasion of duty and subsequent seizure of a Range Rover car imported into India. The car was seized for fraudulently availing duty exemption amounting to Rs.60,13,920. The petitioner, claiming ownership of the car, sought its release, leading to the issuance of a provisional release order under Section 110A of the Customs Act, 1962.2. The petitioner, through counsel, contested the terms of the provisional release order, deeming them harsh and arbitrary. The order required the beneficial owner to pay the full differential duty, execute a bond, and provide a substantial bank guarantee. The petitioner challenged these conditions, leading to the filing of a writ petition seeking relief from the terms imposed.3. The respondents argued that the duty amount of Rs.60,13,920 had indeed been evaded and contended that the conditions imposed were lawful. They maintained that the petitioner was obligated to pay the duty, interest, and penalties as determined by the Adjudicating Authority. The respondents sought the dismissal of the writ petition based on these arguments.4. After considering the arguments presented, the Court modified the conditions of release imposed in the provisional release order. The Court deemed it reasonable to require the petitioner to deposit 50% of the maximum duty payable and provide a bank guarantee for the remaining 50%. Additionally, the petitioner was directed to execute a bond and undertake not to encumber or alienate the vehicle until the adjudication process was completed. The judgment disposed of the writ petition accordingly, outlining the revised conditions for the release of the seized car.