2002 (1) TMI 74 - HC - Customs

Summary

Issues involved:
- Declaration of charge on vehicles
- Seizure/detention of vehicles
- Injunction against interference
- Redemption of pledge
- Allegations of custom duty evasion
- Violation of import conditions
- Validity of pledge by Defendant No. 1
- Legal procedures under Customs Act
- Ad interim injunction application
- Custody and disposal of seized goods

Detailed Analysis:

Declaration of Charge on Vehicles:
The plaintiff filed a suit seeking a declaration that their charge on the vehicles ranks higher than that of defendants 2 and 3. The plaintiff had advanced amounts against the pledge of imported cars by Defendant No. 1 for a temporary loan, with details provided in the suit.

Seizure/Detention of Vehicles:
Defendants 2 and 3 seized the vehicles, alleging custom duty evasion by Defendant No. 1. The plaintiff claimed that their charge on the cars predates any dispute over duty evasion and that the vehicles cannot be removed from their custody.

Injunction Against Interference:
The plaintiff sought injunctions to restrain defendants from interfering with their possession of the vehicles and to redeem the pledge by paying the amount. An ex parte order was passed to prevent interference, pending the suit.

Allegations of Custom Duty Evasion:
Defendants 2 and 3 alleged that the vehicles were imported by misrepresentation and fraud, violating import license conditions. They claimed that the plaintiff, a car dealer, cannot claim interest on the cars overriding the Customs Act provisions.

Validity of Pledge by Defendant No. 1:
Defendant No. 1 supported the plaintiff's assertions, while defendants 2 and 3 accused the plaintiff of aiding smugglers and violating the terms of the EPCG scheme.

Legal Procedures Under Customs Act:
The judgment referred to provisions of the Customs Act regarding seizure, confiscation, and appeal procedures. The court highlighted that the goods were seized and given to the plaintiff under the Act, and the plaintiff was restricted from dealing with the vehicles without permission.

Ad Interim Injunction Application:
During the suit, an ad interim injunction was sought by the plaintiff to prevent interference with the vehicles. The court dismissed the application but imposed conditions on the custody and disposal of the goods by defendants 2 and 3.

Custody and Disposal of Seized Goods:
The court ordered completion of the investigation within three months and allowed defendants 2 and 3 to take custody of the goods. However, they were prohibited from disposing of or removing the goods without court permission.

The judgment clarified that no opinion was expressed on the merits of the matter and emphasized that the court's orders were not indicative of any decision on the case's substance.