TMI Blog2010 (7) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate writ, order or direction, quashing and setting aside the order dated 12.5.2010 passed by the respondent No.3 bearing No.MHV/BRK/01/2010-11 by which the respondent No.3 has called upon the petitioner to deposit Rs.40,62,907/- being 20% of the provisional duty in terms of regulation-2 and furnish bank guarantee for Rs.1,62,51,627/- being balance amount of differential duty which is contrary to the provisions of Sec. 18 read with Regulations, as the order of the respondent No.3 is not in consonance with the order passed by this Hon'ble Court in SCA No.5360 of 2010 and further be pleased to modify/amend/clarify the said order passed by the respondent No.3 and delete the condition of furnishing bank guarantee as well as payment of differential amount as the petitioners are ready and wiling to furnish bond, undertaking to the satisfaction of this Hon'ble Court AS WELL as to the Customs Dept. and petitioner is ready and wiling to pay the custom duty as per the MOA entered into by petitioner No.1 with petitioner No.2 on the basis of which present bill of entry has been filed and permit the petitioner to remove the wreck of D.V. Platinum-II which is sinking in the sea of Gopnath a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and damage to sea and blockage of grand channel as Monsoon is fast approaching and if the vessel is further grounded and broken into pieces and sunk, it will block the grant channel and the entire traffic will be blocked and therefore in the interest of justice and looking to the alarming situation, before the issue of adjudication of payment of duty is decided, the permission for removal of wreck is required to be granted. (B) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, quashing and setting aside the order dated 31.3.2010 issued by the respondent no.3 by which the respondent no.3 has directed to file Bill of Entry on the basis of first MOA which the petitioner has entered into with M/s. Haryana Ship Demolition Pvt. Ltd. which stands cancelled and further be pleased to direct the respondent no.3 to assess the Bill of Entry which petitioner no.2, the intending purchaser of the petitioner has sent by RPAD to the respondent no.3 on 22.1.2010 keeping in mind the order passed by the Gujarat Maritime Board declaring D.V. Platinum-II as wreck and price declared by the petitioner in the MOA dated 23.12.2009 for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed in accordance with the provisions of Section 18 of the Customs Act, 1962 read with Customs (Provisional Duty Assessment) Regulations, 1963. 5. Upon such statement having been made on behalf of respondent Nos. 2 and 3, learned Senior Advocate appearing for the petitioners has submitted that the petitioners shall pay the duty and furnish security/bond for differential duty as required by the relevant provisions of the Act with Regulations in accordance with law subject to rights and contentions of the parties to agitate in appropriate proceedings, if so warranted. 6. Upon completion of the aforesaid proceedings, learned Counsel for respondent Nos. 2 and 3 has informed the Court that the vessel (Wreck) shall be permitted to be taken to the landing place in accordance with law subject to the final assessment being framed in accordance with law. 7. In light of the aforesaid arrangement worked out by the parties, the Court is not required to deal with the respective contentions on merits leaving it open to the parties to agitate the same in accordance with law in appropriate proceedings, if need be. Respondent Nos. 2 and 3 shall complete the provisional assessment not later ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential duty i.e. Rs.1,62,51,627/-. This is not in accordance with the directions of this Court. The petitioners are ready and willing to make payment of Rs.1,71,38,077/- being the duty amount and also to furnish the Bond for the differential amount of Rs.2,03,14,534/-. By way of security, the petitioners are ready to provide the security in the form of materials worth Rs.2,03,14,534/-. In that view of the matter, by way of ad-interim relief, the respondents are directed to permit the clearance on the payment of Rs.1,71,38,077/- being the amount of duty as well as on furnishing requisite bond for an amount of Rs.2,03,14,534/- and furnishing security by the petitioners in the form of materials worth Rs.2,05,00,000/- to the satisfaction of the respondents Authority. These directions should be complied with by the Authority not later than 21st June, 2010, if the petitioners satisfy the above conditions. The petitioners are directed to place on record xerox copy as well as typed copy of Bills of Entry along with letter dated 10.5.2010. Direct Service is permitted." 5. The said order subsequently came to be amended vide order dated 20.05.2010 which reads thus: "1. Mr. Bharat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions advanced by the learned advocate for the petitioners as regards the conditions inserted in the bond are beyond the scope of the petition. 8. As can be seen from the relief claimed in the petition, it is apparent that what is impugned in the petition is the order dated 12.05.2010 whereby the petitioners have been directed by the Assistant Commissioner, Customs, Bhavnagar, to execute a bond in Customs Series Form No.3 for an amount of Rs.2,03,14,534/- being the amount equal to the difference between the duty that may be finally assessed and the provisional duty; to deposit by way of challan with the proper officer, the sum of Rs.40,62,907/- being 20% of the provisional duty in terms of Regulation 2 of the Regulations; and to furnish bank guarantee issued by any nationalized bank for the balance amount of differential duty, that is, Rs.1,62,51,627/- (Rs.20314534/- - Rs.4062907/-) in favour of the President of India, through the said Assistant Commissioner, in terms of Regulation 4 of the said Regulations. The said order is assailed on the ground that the Regulations provide only for surety or security in the nature of security/bond as well as undertaking and that it is not pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning as to whether the discretion has been validly exercised or not the court cannot undertake an exercise of substituting its own discretion, except in a case where it is found that the so-called exercise of discretion was either mala fide or coloured by collateral consideration. 12. In light of the aforesaid legal position if one examines the communication dated 12.05.2010, which is under challenge in the present petition, it becomes clear that the respondent authority has virtually carried out the process stipulated by Section 18 of the Act read with the Regulations when one considers the following extracts from the said communication : "Pending production of original commercial invoice, bill of sale, document evidencing payment of purchase price to the sellers and any other document/information required by the department for proper assessment of duty on the vessel, the E/E shall be provisionally assessed based on the price declared by you in terms of Section 18 read with Customs (Provisional duty assessment) Regulation, 1963, subject to your furnishing bond, bank guarantee as narrated hereinafter. For the purpose of determining differential duty involved on the vessel und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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