2022 (10) TMI 1138 - HC - Customs

Seeking provisional release of vehicle - illegal importation - the only allegation against the petitioner is that the petitioner did not undertake proper due diligence before purchasing the vehicle and therefore, the show cause notice proposes to impose the penalty on the petitioner for the same - HELD THAT - The show cause notice (Ext.P7) proceeds on the basis that the petitioner had purchased the vehicle from a second hand car dealer in Chennai. At present there is nothing in the show cause notice which suggests that the petitioner was aware of the fact that the vehicle in question was brought into the country without payment of duty for use of the Cambodian Embasssy and was thereafter, it was surreptitiously sold without payment of the necessary Customs Duty. The petitioner shall pay 50% of the customs duty mentioned in Ext.P5 and will also execute a bank guarantee for the balance 50%. The bank guarantee will be kept alive till the proceedings are completed in the matter - The petitioner shall execute a bond for a sum of Rs.84 lakhs (PD Bond) in the manner prescribed by the 3rd respondent. Writ petition is allowed.

Summary

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.