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TMI Blog2015 (11) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... a license with certain conditions wherein the exporter is required to undertake export obligation. Likewise, in the present case, the petitioner was stipulated to fulfil an export obligation of USD 7,39,969/-. Based on the said scheme, the total duty saved for the import of the aforesaid machines came to be Rs. 7,57,105/-, therefore, as per the said scheme, the petitioner importer is required to furnish a Bank guarantee in favour of the Commissioner of Customs, Chennai, totalling 100% value of the duty saved portion. Accordingly, the petitioner had also furnished a Bank Guarantee bearing Number 97/44 in favour of the respondent for a sum of Rs. 7,58,000/- pertaining to the duty saved portion under the license and that the said Bank guarantee was issued by M/s.Indusind Bank Limited, Avinashi Branch, for the period from 01.12.1997 to 01.12.2002. However, the respondent, vide its letter dated 26.12.2000, to M/s.Indusind Bank Limited, invoked a partial sum of Rs. 4,07,245/- towards duty and interest from the bond / guarantee stating that the petitioner had failed to fulfil pro-rata export obligation in the customs notification. Thereafter, the said Bank by letter dated 05.01.2001 paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the submitted Bank guarantee, which was given as a security, therefore, had the respondent provided an opportunity of personal hearing, the petitioner would have appeared in person and would have explained everything, but, since such procedure was not followed, the present impugned order is liable to be set aside. 3. In support of his submissions, he has relied upon a judgment of the Apex Court in the case of Oswal Agro Mills Limited v. Assistant Collector of Central Excise (1994 (2) SCC 546) for a proposition that furnishing of bank guarantee cannot be regarded as payment of duty by the importer to the revenue. Further, a Division Bench of this Court in the case of Commissioner of Customs v. M/s.Aristo Spinners Private Limited ( passed in C.M.A.No.213 of 2008, dated 25.01.2008) held that the stand of the review that the claim made by the respondent is barred by Section 27 of the Act cannot be legally sustained, as the same cannot be made applicable. 4. Per contra, learned counsel appearing for the respondent urged this Court to dismiss the writ petition, as they cannot come to this Court by filing writ petition when they have got an appeal remedy before the CESTAT as per Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- and annual average is fixed US$ NIL. It is seen that you have produced Original Shipping Bills for the export obligation against the Licence as below:- PERIOD E.O. FULFILLED EXCESS (+) SHORT FALLS (-) 1st year/block 03.09.1997 to 02.09.1998 US$ 41,253/- (+) 2nd year/block 03.09.1998 to 02.09.1999 US$ 44,759/- US$ 29,237/-(-) 3rd year/block 03.09.1999 to 02.09.2000 US$ 3,89,332/- US$ 1,67,344/- (+) 4th year/block 03.09.2000 to 02.09.2001 US$ 3,39,295/- US$ 1,17,307/- (+) 5th year/block 05.02.2002 to 05.02.2003 NIL NIL Total E.O. Fulfilled US$ 8,14,639/- The original shipping bills are returned herewith. (Y.Packiyaraj) Asst.Director General of Foreign Trade For Joint Director General of Foreign Trade Copy to:- The Commissioner of Customs, Chennai, for information and necessary action with a request to release the Bank Guarantee subject to his satisfaction" From the above said proceedings of the Ministry of Commerce, it is clear that the petitioner Company had fulfilled their export obligation and thereafter, they have also issued with Export Obligation Discharge Certificate on 26.05.2003, wherein a sum of USD 8, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s open to the revenue to invoke the bank guarantee and demand payment thereon. The bank guarantee is security for the revenue, that in the event the revenue succeeds its dues will be recoverable, being backed by the guarantee of a bank. In the event, however unlikely, of the bank refusing, to honour its guarantee it would be necessary for the revenue or, where the bank guarantee is in favour of the principal administrative officer of the court, that officer to file a suit against the bank for the amount due upon the bank guarantee. The amount of the disputed tax or duty that is secured by a bank guarantee cannot, therefore, be held to be paid to the revenue. There is no question of its refund and Section 11-B is not attracted." 9. Following the above said judgment, Hon'ble Divison Bench of this Court in M/s.JrajExports (Pr) Limited's case (cited supra) held thus: "4. From the facts narrated above, it is a case where the appellant's request for refund of the bank guarantee wrongly encashed was rejected on the ground that the claim is time barred. The case of the appellant has to be rejected on two grounds, firstly on facts. It is evident from the records that the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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