Partly allowed

Firoz K.M., v. Union of India

Kerala HC19 Sept 2023WP(C)/728/2023

Case brief

AI extract

What is this about?

The Kerala High Court, in a writ petition, examined the requirement to furnish a bank guarantee for the release of a petitioner's domestic car seized by Customs authorities during a gold smuggling case. The court held that circulars allowing bank guarantees for seized imported goods do not apply to domestic vehicles. Consequently, the order demanding a bank guarantee was set aside, and release was

What did the court decide?

Set aside the impugned order directing furnishing of bank guarantee. Direct release of the seized vehicle upon execution of a bond for Rs.7.60 lakhs with two solvent sureties.

Firoz K.M., Vs Union of India — Customs and Excise | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH

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TUESDAY, THE 19^TH DAY OF SEPTEMBER 2023 / 28TH BHADRA, 1945

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WP(C) NO. 728 OF 2023

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PETITIONER/S:

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FIROZ K.M.,AGED 42 YEARS, S/O.ABDUL GAFOOR K.M., VELANCHERI HOUSE, ALUNGAL, PULIKKAL, MALAPPURAM, KERALA, PIN - 673637

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BY ADVS. MANU TOM BALAMURALI K.P. SHAJI T.M. RENIL IQUBAL K.

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RESPONDENT/S:

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1 UNION OF INDIA, REPRESENTED BY THE COMMISSIONER OF CUSTOMS, CUSTOMS PREVENTIVE COMMISSIONERATE, CATHOLIC CENTRE, BROADWAY, ERNAKULAM, KERALA, PIN - 682031

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2 ADDITIONAL COMMISSIONER OF CUSTOMS (PREVENTIVE),CUSTOMS PREVENTIVE COMMISSIONERATE, CATHOLIC CENTRE, BROADWAY, ERNAKULAM, KERALA 682 031.

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BY ADVS. B.PRAMOD A.K.PREETHA FOR R2 SHRI.B.PRAMOD, CGC FOR R1

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 728 OF 2023

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J U D G M E N T

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The present writ petition has been filed for quashing of the impugned order dated 7.11.2022, Ext.P3, passed by the second respondent, whereby the petitioner has been directed to furnish bank guarantee for Rs.7,60,000/- for release of TATA ALTROZ car bearing Regn.No.KL-84-3508, which was originally registered in the name of the petitioner.

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The facts of the case is that during the surveillance kept on 26.9.2022 outside the Cochin International Airport, the petitioner's TATA ALTROZ car bearing Regn.No.KL-84-3508 was intercepted. During interrogation of the three occupants in the vehicle, it was found that the petitioner and one Shajahan had arrived at the airport in the said vehicle to receive a pax by name, Sri.Abdul Kasim, Chakkattu Mukkil, Malappuram, who had arrived from Dubai to Cochin in Air India Express Flight IX-434 on 26.9.2022. Personal search of the said passenger resulted in recovery of 1072 grams of gold in compound form,

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WP(C) NO. 728 OF 2023

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concealed in rectum. Further search of the vehicle resulted in recovery of INR Rs.99,500/-. 3. The Customs authorities apprehended the gold as smuggled gold in violation of the Customs Act, 1962 and seized the same. Besides that, the Customs authorities seized the amount of Rs.99,500/- intended to be the remuneration to the passenger and petitioner's TATA ALTROZ car bearing Regn.No.KL-84-3508 intended to be used for transporting the smuggled gold. The petitioner moved an application for release of the car, on which the impugned order dated 7.11.2022, Ext.P3, has been passed directing the petitioner to furnish a bond and bank guarantee for Rs.7,60,000/-, which is the insured declared value of the vehicle.

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Learned counsel for the petitioner submits that bank guarantee can be demanded only in cases of imported seized goods. In the present case, gold is said to be the imported goods. Vehicle of the petitioner is not an imported item and therefore, direction for furnishing of bank guarantee for release of the same, which was

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WP(C) NO. 728 OF 2023

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seized on 26.9.2022, is without jurisdiction and unsustainable.

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Smt.A.K.Preetha, learned Standing Counsel for the respondents, however, submits that Central Board of Excise and Customs, Ministry of Finance, Department of Revenue, Government of India had issued circular dated 16.8.2017, which provided for release of seized goods provisionally upon request of the owner of the seized goods, subject to executing a bond for the full value/estimated value of the seized goods, besides making deposit of security, which may be bank guarantee.

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I have perused the said circular. Paragraph Nos.2.1 to 2.3 of the said circular read as under:

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“2.1. Seized imported goods shall be released provisionally by the competent authority upon request of the owner of the seized goods, subject to executing a Bond for the full value/ estimated value of the seized goods.

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2.2. Further, in addition to the Bond mentioned at Para 2.1. above, the competent authority shall take a Bank Guarantee or Security Deposit to cover the following:

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WP(C) NO. 728 OF 2023

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i. the entire amount of duty/differential duty leviable on the seized goods being provisionally released;

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ii. amount of fine that may be levied in lieu of confiscation under Section 125 of the Customs Act, 1962 at the time of adjudication of the case. While securing the same, the competent authority shall take into account the nature of the seized goods, the duty and charges payable on the said goods, their market price and the estimated margin of profit;

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iii. amount of penalties that may be levied under the Customs Act, 1962, as applicable, at the time of adjudication of the case.

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2.3. Depending on the specific nature of a case, the competent authority may, for reasons to be recorded in writing, increase or decrease the amount of security deposit as indicated above.”

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On perusal of paragraph No.2.1 of the said circular, it is evident that the said circular is in respect of the seized imported goods and cannot be made applicable in respect of the vehicle herein, which is not an imported seized goods. The condition prescribed in the impugned order for furnishing bank guarantee for Rs.7,60,000/-, which is the insured declared value

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WP(C) NO. 728 OF 2023

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of the vehicle, is wholly unjustified. Therefore, the impugned order dated 7.11.2022, Ext.P3, to that extent is set aside. The second respondent is directed to release petitioner's vehicle, TATA ALTROZ car bearing Regn.No.KL-84-3508, on the petitioner executing a bond for an amount of Rs.7,60,000/- (Rupees seven lakhs sixty thousand only) with two solvent sureties each for the like amount to the satisfaction of the second respondent within a period of two weeks from today. On the petitioner executing a bond as above, his TATA ALTROZ car bearing Regn.No.KL-843508 seized on 26.9.2022 shall be released to him.

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With the aforesaid direction, the present writ petition stands allowed in part. Pending interlocutory applications, if any, in the writ petition would stand dismissed.

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Sd/DINESH KUMAR SINGH JUDGE

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WP(C) NO. 728 OF 2023

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APPENDIX OF WP(C) 728/2023

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PETITIONER EXHIBITS

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Exhibit-P1 THE TRUE COPY OF THE RC BOOK OF THE VEHICLE BEARING NUMBER KL-84-3508. Exhibit-P2 TRUE COPY OF THE REPRESENTATION (PETITION) DATED 12/10/2022 SUBMITTED BY THE PETITIONER BEFORE THE ADJUDICATING AUTHORITY. Exhibit-P3 THE TRUE COPY OF THE ORDER DATED 07/11/2022 PASSED BY THE ADDITIONAL COMMISSIONER OF CUSTOMS (PREVENTIVE), THE SECOND RESPONDENT.

Firoz K.M., v. Union of India

Case brief

What is this about?

What did the court decide?

Firoz K.M., v. Union of India

Case brief

What is this about?

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