2010 (3) TMI 385 - HC - Customs

Seizure- The Petitioner is challenging the order seizing the vehicle imported by him and the provisional order of release passed by the Assistant Commissioner of Customs. Car seized by authorities denying exemption available to import of new car alleging that imported car was used car as purchased from third party and was registered in U.K. prior to India. Condition for provisional release requiring payment of differential duty plus interest execution of bond and bank guarantee. Held that- undertaking executed petitioner will not remove transfer sell etc. car without prior permission of DRI Bangalore. Tentative calculation showing excess payment. Department directed to provisionally release car subject to bond of full value and bank guarantee. Petitioner not to create any third party right till finality of adjudication proceedings.

Summary

Issues Involved:
Challenge to order seizing imported vehicle and provisional release order.

Analysis:
1. Challenge to Seizure Order:
The petitioner imported a Ferrari F 430 car and paid customs duty based on the invoice value. The Director of Revenue questioned the concessional duty claim under a Customs Notification, stating the car was not brand new due to prior registration in the UK. The petitioner claimed to have overpaid by Rs. 36,92,121. The Respondents seized the car without notice, leading to a provisional release order demanding a differential duty payment of Rs. 15,02,239 plus interest, bond execution, and a bank guarantee.

2. Contentions of the Parties:
The petitioner argued that the car was not second-hand, citing the date of manufacture and registration. Referring to a Customs Tribunal judgment, the petitioner contended that prior registration does not negate new car status. The Respondents asserted the car was second-hand, as it was sold by the manufacturer to a UK company before being transferred to the petitioner. The Respondents claimed the benefit of a Customs Notification for new vehicles was not applicable.

3. Legal Analysis and Judgment:
The Court noted the pending adjudication proceedings and deemed the challenge premature regarding the seizure order. However, considering the provisional release conditions as harsh, the Court modified the order. The petitioner was directed to execute a bond and provide a bank guarantee, with restrictions on dealing with the car until final adjudication. The Respondents were instructed to return all original documents related to the car.

4. Final Order:
The Court made the rule absolute, directing the provisional release of the Ferrari F 430 car subject to specified conditions. The provisional release order from 23-2-2010 was modified accordingly, with no costs imposed.

This detailed analysis covers the legal nuances, arguments presented, and the final judgment of the High Court in the case involving the seizure and provisional release of the imported vehicle.