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2018 (2) TMI 1271 - HC - CustomsRecovery proceedings - Refund u/s 27(1) of the Customs Act, 1962 - appropriation towards the petitioner’s liability arising out of an order dated 25.04.2016 - duty drawback - whether the adjustment of a refund granted amounts to a coercive step? - Held that: - It does - Merely because an amount is lying with the respondents the adjustment thereof by the respondents, makes no difference. The unilateral action of adjustment constitutes a coercive measure as much as any step or action to recover an amount lying with the petitioner or with any other party on behalf of the petitioner. Whether the circular places an absolute bar of prohibition against the respondents’ recovering an amount in excess of the amount deposited as per the said circular? - Held that: - It does not - The word “shall” in clause 4.2 must be read as “may” for more than one reason. Firstly, if it is read as “shall” and not as “may”, the circular would be contrary to section 142 of the Customs Act, 1962. Had we not construed the word “shall” as “may”, we would have readily struck down paragraph 4.2 of the circular as being contrary to section 142 and, therefore, illegal. In our view, however, the word “shall” must be read as “may”. The validity of the circular is accordingly upheld subject, however, to the word “shall” therein being read as “may”. In the present case, one of the reasons for passing the order is that an appeal had not been filed in the name of one of the proprietary firms. That is irrelevant. These are not firms established under the Partnership Act, 1932, or incorporated under the Companies Act, 1956. They are merely the names in which the petitioner carries on business as the sole proprietor thereof. The name in which the petitioner carries on business is not relevant. Proceedings cannot be filed in such name or names. The petitioner having filed the appeal, therefore, serves the purpose of challenging the demand. The impugned order is quashed and set aside - respondents shall be entitled to encash the bank guarantee. The respondents shall be entitled to retain the amount deposited and the amount recovered under the bank guarantee but subject to the fresh orders and the result of the challenge thereto, if any. Petition disposed off.
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