Home Case Index All Cases Customs Customs + HC Customs - 2016 (5) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 776 - HC - CustomsEntitlement to extension of EPCG licence - Export licence had expired prior to the policy spoken of by the petitioner - Recovery of certain claims - Petitioner submitted that BIFR has extended the export obligations for a period of ten years from March 31, 2008 and the scheme sanctioned by the BIFR is under implementation. Therefore, it is binding upon the respondents - Held that:- the authorities will look into the performance of the first petitioner in respect of the EPCG Licence subsequent to the expiry of the period sanctioned by the BIFR, i.e., ten years from March 31, 2008. The authorities will be at liberty to take such steps against the petitioners in respect of its obligations under such licence if the petitioners have failed to discharge such obligations. Security for the event of default - in fulfilling the obligations under the licence within the extended time - Petitioner submitted that relevant circulars of the department allow the petitioner to furnish security by way of a bank guarantee. Also the bank guarantee in question has been renewed on May 3, 2016 and is in terms of the General Exemption No. 56 and the Circular No. 52/95, the same should be allowed to be accepted. Moreover, as the petitioner being a sick company it would be harsh and burdensome if it is directed to put in cash security. Held that:- the petitioner has obtained the bank guarantee by furnishing cash security to the bank issuing the bank guarantee. Therefore, the petitioner is in a position to put in a cash security with the bank concerned to obtain the bank guarantee. The plea of undue hardship is not available to the petitioner in such circumstances. Moreover, the present bank guarantee is valid upto March 31, 2019. In the event of the authorities not making any demand within such period of time, the petitioner will be entitled to take the plea that the bank guarantee is no longer valid. In such eventuality, the State Exchequer ultimately suffers. Conversely, if money is allowed to be deposited with the authorities, the same will enure to the benefit of all the parties. The petitioner will receive refund of the money deposited in the event it is found to be refundable. However, in the event the petitioner is found to be a debtor to the authorities then the money lying with the authorities, can be adjusted against such claim without any further action. Invoking the bank guarantee and receiving the payment, entails further proceedings and allows a party furnishing the bank guarantee to indulge in further litigation. If a banker issues a bank guarantee without taking 100% cash security in respect thereof, then such banker is extending a credit facility out of public money. If such a bank guarantee is invoked, then the public money stands to be jeopardized. Such a scenario is not healthy. A private party should not be allowed to do its business on the strength of public money. Therefore, the petitioner will deposit a cash security with the authorities as security for the subject licence. - Petition disposed of
|