Court Orders Provisional Release of Seized Car Pending Customs Dispute Resolution

The court directed the provisional release of an imported car, a 2019 RHD Ford Mustang GT Coupe, seized by customs. The petitioner paid customs duty but faced delays in release. Disputes arose over the car's classification as new or second-hand. The court applied Section 110-A of the Customs Act, allowing provisional release pending adjudication. Emphasizing the petitioner's duty to comply with specified conditions, the court ordered execution of a bond, bank guarantee, and restrictions on third-party rights. The car and documents were to be released within two weeks upon compliance, concluding the writ petition.

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Issues Involved:
1. Provisional release of the imported car.
2. Classification of the car as new or second-hand.
3. Compliance with the Customs Act, 1962.
4. Application of Section 110-A of the Customs Act.
5. Reference to past judicial decisions.

Issue-wise Detailed Analysis:

1. Provisional Release of the Imported Car:
The petitioner sought a direction for the provisional release of a car imported and seized by customs authorities. The car, a brand new 2019 RHD Ford Mustang GT Coupe, was detained and seized, and the petitioner had paid the customs duty amounting to Rs. 72,48,875.00. Despite requests for provisional release, no decision was taken, prompting the petitioner to file an appeal with the CESTAT, which was non-functional due to the lockdown. The petitioner then filed the present writ petition.

2. Classification of the Car as New or Second-hand:
The customs authorities, upon examination, found modifications suggesting the car was a second-hand model, possibly from 1967, thus violating the import policy and categorizing it as a prohibited good. The petitioner disputed this, asserting that the car was brand new and questioning the examination by customs officers and a chartered engineer.

3. Compliance with the Customs Act, 1962:
The vehicle was seized under Section 111(d) of the Customs Act, 1962, for being a prohibited good. The petitioner contended that the seizure was unjustified and that the vehicle had been under detention and seizure for over six months without adjudication or confiscation.

4. Application of Section 110-A of the Customs Act:
Section 110-A allows for the provisional release of seized goods pending adjudication. The petitioner argued that this provision confers a right to seek provisional release, and the respondents must exercise discretion judiciously. The respondents, however, emphasized the car's classification as a prohibited good, arguing against provisional release without the petitioner's cooperation.

5. Reference to Past Judicial Decisions:
The petitioner referenced the case of Ashish Puravankara Vs. Commissioner of Customs (Import), where the court directed the provisional release of an imported Ferrari F 430 car under certain conditions. The court found this case applicable, noting that Section 110-A does not restrict provisional release based on the classification of goods as prohibited.

Judgment Summary:
The court considered the facts, noting the dispute over the car's classification and the petitioner's payment of customs duty. The court clarified that Section 110-A provides a mechanism for provisional release of seized goods, protecting revenue interests while pending adjudication. The court referenced the Ashish Puravankara case, emphasizing that the statute allows for provisional release without restrictions based on the classification of goods.

The court issued the following directions:
1. The petitioner must execute a bond for the assessable value of the car.
2. The petitioner must furnish a bank guarantee of 50% of the assessable value.
3. The petitioner must not create any third-party rights in the car until adjudication reaches finality.
4. Upon compliance, the respondents must provisionally release the car and all original documents within two weeks.

The writ petition was disposed of with these directions, and the order was to be digitally signed and acted upon by all concerned parties.

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