The Court examined the legality of conditions imposed by Customs for releasing a seized imported vehicle, including the requirement to furnish a bank guarantee, and modified the amount.
Condition requiring Rs. 6 lakhs bank guarantee modified to require Rs. 3 lakhs as interim release subject to investigation completion.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE S.V.BHATTI
WEDNESDAY, THE 03RD DAY OF APRIL 2019 / 13TH CHAITHRA, 1941
WP(C).No. 7584 of 2019
PETITIONER:
YADAV AVINASH SAHEBRAO AGED 32 YEARS S/O.SAHEBRAO DHONDIBA YADAV, R/O. MORDARI, KHED SHIVAPUR BAUG, PUNE HAVELI, MAHARASTRA- 412 205.
BY ADVS. SRI.P.A.AUGUSTIAN SMT.CIMY VARGHESE SMT.LINDA.M.J. SRI.M.A.BABY
RESPONDENTS:
1 COMMISSIONER OF CUSTOMS (PREVENTIVE), 5TH FLOOR, CATHOLIC CENTRE BROADWAY, COCHIN- 31.
2 COMMISSIONER OF CUSTOMS, GROUP 5B, CUSTOM HOUSE, 60, RAJAJI SALAI, CHENNAI- 600 001.
3 COMMISSIONER OF CUSTOMS, ICE HOUSE, 41/A, SASOON ROAD, PUNE- 411 001.
BY ADV. SRI.P.R.SREEJITH, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.04.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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JUDGMENT
Heard Sri. P.A Augustin, the learned counsel for the
petitioner and Sri. P.R Sreejith, the learned Standing Counsel for the respondents.
2. The petitioner claims to have purchased a Hummer H2 car imported by an NRI to Chennai Port in July, 2016. According to petitioner, the car was subjected to adjudication and importer i.e the seller of the petitioner paid the following amounts as stated in Ext.P2:
Payment of Custom against B.E (In Rs.)
6135081/26/07/2016 DUTY : 3296434 FINE : 300000 INTEREST : 0 PENALITY : 50000 TOTAL: 3646434
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3. The vehicle was seized and kept in the custody of 3 rd
respondent as per Exts.P3 and P4. Hence the writ petition. The petitioner prays for the following reliefs:
i . “issue a writ in the nature of certiorari or any other appropriate writ, order or direction to call for the records leading to Ext.P3
ii . issue a writ of mandamus or any other appropriate writ, direction or order, directing the respondent to relese the car bearing Registration No. Mh-12-PL-4141
iii . issue a writ of mandamus or any other appropriate writ, direction or order, directing the respondent to pay suitable compensation of RS.5 lakhs for illegal detention of the car
iv . issue a writ of mandamus or any other appropriate writ, direction or order, directing the respondent to release the car provisionally to the petitioner which is imported under Ext.P1
v . grant such other relieves that his Hon'ble Court may deem fit and proper in the facts and circumstances of the case
and
award the cost of proceedings to the petitioner.”
4. 1 st respondent filed a counter affidavit opposing the
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writ prayer in all fours.
5. Sri. P.A Augustin contends that the seizure or
continued possession of subject vehicle, with the 3 rd respondent per se is illegal. According to him, the vehicle is subjected to all the orders at the time of import and thereafter
it is free to ply on the roads; the vehicle ought not have been seized much less continued to retain possession under Ext.P4. Therefore, the seizure is completely illegal and contrary to Article 226 of the Constitution of India. The learned counsel incidentally challenges the conditions imposed by the Department through letter No. C.No.VIII/26/22/2018 CCP Prev
dated 05.03.2019 and the operated portion reads thus:-
“1 . executing a bond on the assessble value of the vehicle as per the bill of entry, on conditions that
i . the vehicle must be kept under safe custody and in good condition.
ii . Not to part w ith, dispose off or in any other way alter or deal with the vehicle, without express written permission of the undersigned
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iii . the vehicle must be surrendered as and when directed by the undersigned.
2. furnishing of bank guarantee of 35% of the assessble value in favour of the commissioner of Customs, Chennai.”
6. Very onerous conditions imposed do not bear in mind
the relevant facts and circumstances. The petitioner, it is stated, has no objection to conform to condition Nos. i to iii of the letter dated 05.03.2019, and submits that the petitioner cannot be called upon to give bank guarantee for any sum.
7. Sri. P.R Sreejith, the learned Standing Counsel for the respondents invites the attention of the Court to the extent of investigation invoked in the matter and from instruction submits that, the petitioner cannot treat Ext.P2 as an axiomatic document establishing discharge of all levies and burdens fastened on an importer for importing a car at entry point. The veracity of Ext.P2 is verified by the Department since it is matter of record, a conclusion upon verification of record is done, the Port where the penalties are paid could be
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WP(C).No. 7584 of 2019
collected and arrived at. Adverting to letter dated 05.03.2019, he contends that, the conditions imposed are to preserve the subject vehicle upon release in favour of petitioner and the condition imposing bank guarantee is to ensure not only preservation and to recover dues if any that may become payable in this behalf. He contends that the condition calling upon petitioner to furnish Rs.6 lakh bank guarantee is correct in the particular facts and circumstances of the case.
8. I have heard the learned counsel and perused the records. The above narration, narrows down the controversy between the petitioner and the respondents to the conditions
calling upon the petitioner to furnish bank guarantee of Rs.6 lakh for release of vehicle. This Court tried to find out from the learned Standing Counsel about the basis for either percentage or the value upon which Rs.6 lakh is directed to be deposited. He fairly states that the letter dated 05.03.2019 does
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not disclose those details. However he refers to Ext.P2 and states that the officer has undertaken notional exercise and fixed Rs.6 lakh. The investigation pursuant to Exts.P3 and P4 are still pending, therefore, the petitioner cannot be allowed to seek release of vehicle without conditions. Hence this Court is also of the view that the conditions covered by the paragraph 1(i) to (iii) are tenable. Condition No. 2 calling upon the petitioner to furnish bank guarantee for a sum of Rs.6 lakh is examined by this order. This Court upon careful consideration of the taxes/duties alleged to have been paid on the vehicle, the value of the vehicle etc., imposing a further condition of Rs.6 lakh for releasing the vehicle appears to be onerous on the petitioner to enjoy the possession of the vehicle in the interregnum. Therefore, condition No.2 in letter dated 05.03.2019 alone is modified to the following effect.
a ) The petitioner furnishes bank guarantee of a sum of
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Rs.3 lakhs in favour the Commissioner of Custom, Chennai,
produce the bank guarantee along with the copy of this order and thereafter the respondents consider and release the vehicle subject to other conditions in letter dated 05.03.2019.
b ) The respondents to complete the investigation undertaken pursuant to Exts.P3 and P4 as expeditiously as possible preferably within three months, subject to the petitioner without fail co-operating with the respondents for timely completion of the investigation.
c ) The respondents if are made to notice noncooperation by the petitioner the authorities can record the reasons and proceed further ex parte.
d ) It is made clear that this Court is conscious of the fact that the arrangement made through this order is only an
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interim arrangement, none of the observations made in the
order shall be understood as expressing view on the merits
of the investigation or case.
Sd/S.V.BHATTI JUDGE
JS
WP(C).No. 7584 of 2019
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APPENDIX
PETITIONER'S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE BILL OF ENTRY DATED 26.07.2016.
EXHIBIT P2 TRUE COPY OF THE CYBER RECEIPT DATED 16.11.2016 WITH COPY OF THE CHALLAN. EXHIBIT P3 TRUE COPY OF SEIZURE MEMO DATED 07.02.2019. EXHIBIT P4 TRUE COPY OF PANCHANAMA DATED 07.02.2019. EXHIBIT P5 TRUE COPY OF LETTER DATED 12.02.2019. EXHIBIT P6 TRUE COPY OF LETTER DATED 14.02.2019. EXHIBIT P7 TRUE COPY OF LETTER DATED 22.02.2019. EXHIBIT P8 TRUE COPY OF LETTER DATED 26.02.2019. EXHIBIT P9 TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT REPORTED IN 2010(251) E.L.T.42.
RESPONDENT'S/S EXHIBITS:
EXHIBIT R1 (A) TRUE COPY OF THE RELEVANT PAGES OF THE IMPORT POLICY OF SECOND HAND/USED VEHICLE.
2 issues framed by the court
Whether the petitioner is legally liable to furnish a bank guarantee of Rs. 6 lakhs for the release of an impugned vehicle detained by Customs.
Whether the Customs Department can impose conditions upon the release of a seized vehicle which underwent prior adjudication.
1 provisions across 1 enactments
YADAV AVINASH SAHEBRAO AGED 32 YEARS
COMMISSIONER OF CUSTOMS (PREVENTIVE), 5TH FLOOR, CATHOLIC CENTRE BROADWAY, COCHIN
COMMISSIONER OF CUSTOMS, GROUP 5B, CUSTOM HOUSE, 60, RAJAJI SALAI, CHENNAI
COMMISSIONER OF CUSTOMS, ICE HOUSE, 41/A, SASOON ROAD, PUNE
S.V. BHATTI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
