2022 (10) TMI 1138 - HC - Customs

Court orders release of high-end vehicle to petitioner with conditions to maintain value and prevent unauthorized sale.

The Court decides to release the vehicle to the petitioner under specific conditions, highlighting factors such as the petitioner's lack of awareness ... Provisional release of seized goods - Protection of revenue through conditions - Due diligence of bona fide purchaser - Bank guarantee and security for customs liability - Execution of bond as condition for release - Judicial interference with administrative release conditions in writ jurisdictionProvisional release of seized goods - Due diligence of bona fide purchaser - Protection of revenue through conditions - Release of the seized vehicle to the petitioner subject to conditions and quashing of the earlier provisional release conditions (Ext.P5). - HELD THAT: - The Court found that the show cause notice (Ext.P7) records the petitioner purchased the vehicle from a second-hand dealer and does not allege that the petitioner knew the vehicle had been imported without payment of duty for use of the Embassy. In the factual matrix the Court accepted that leaving the high-end vehicle in custody of the Directorate risks deterioration in value and condition to the prejudice of the revenue. Balancing the interests of the revenue and the petitioner, the Court held that sufficient and protective conditions can be imposed to secure the revenue while permitting the vehicle to be released to the petitioner. Consequently the conditions in Ext.P5 were set aside and new conditions were imposed to ensure preservation of the vehicle and security for the claimed customs liability. The Court noted that the petitioner must not alienate or encumber the vehicle and must produce it on demand, and that financial security by way of payment and guarantee and a bond would protect the revenue during ongoing proceedings. [Paras 4, 5]The writ petition is allowed: Ext.P5 conditions are quashed and the vehicle is released to the petitioner subject to payment of 50% of the customs duty, execution of a bank guarantee for the remaining 50% to be kept alive until completion of proceedings, execution of a PD bond in the prescribed manner, and maintenance of the vehicle without alienation and production on demand.Final Conclusion: Writ petition allowed; earlier provisional release conditions quashed and the vehicle ordered released to the petitioner on specified security and non-alienation conditions to protect the revenue while the customs proceedings continue. Issues:Proceedings under the Customs Act regarding a vehicle's ownership and import status.Analysis:The petitioner, a priest and Managing Trustee of an educational trust, faces Customs Act proceedings over a vehicle now in their possession. The petitioner claims ignorance of the vehicle's illegal import status, purchased from a Chennai dealer. The show cause notice alleges lack of due diligence by the petitioner. The Deputy Solicitor General argues the vehicle's involvement in a high-end car import racket, initially for the Cambodian Embassy's First Secretary, later registered in Himachal Pradesh and Punjab before the petitioner's purchase. The petitioner's innocence is questioned due to registration documents found in the vehicle. The Court is urged not to interfere with provisional release conditions, citing similar cases nationwide and the availability of appeal remedies.The Court, after hearing both sides, decides to release the vehicle to the petitioner under specific conditions. The judgment highlights key factors influencing this decision: the petitioner's lack of awareness during purchase, the risk of the high-end car deteriorating in value, and the potential revenue loss if the vehicle is not maintained properly. To safeguard revenue interests, conditions are imposed to ensure the vehicle's upkeep and prevent unauthorized sale or encumbrance. Consequently, the writ petition is allowed, and the conditions outlined in the provisional release order are quashed. The vehicle is released to the petitioner subject to conditions such as partial customs duty payment, a bank guarantee, a prescribed bond amount, and obligations to maintain the vehicle's condition and produce it when required by authorities.