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LINK ENTERPRISES Versus UNION OF INDIA AND 2

2015 (12) TMI 1435 - GUJARAT HIGH COURT

Release of bank guarantee - Petitioner already surrendered its warehousing licence and is currently not holding any of the license - Held that:- The record of the case reveals that in connection with the warehousing activities, three cases came to be instituted against the petitioner which culminated into orders against the petitioner whereby the demand and/or the penalty came to be confirmed. The petitioner challenged the orders either before the first appellate authority or the Tribunal, as th .....

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would amount to negating the stay orders granted by the Tribunal because the amount under the bank guarantee would be in addition to the amount directed by the Tribunal to be deposited by way of predeposit. Moreover, once the licence has been surrendered and no amount is outstanding and payable by the petitioner towards the warehousing licence and the bonds executed by the petitioner have been cancelled, the respondents are not justified in retaining the bank guarantees.

Petitioner h .....

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the Tribunal. Moreover, the petitioner has also given an undertaking to the respondents that it will discharge all liabilities that may be finalised or arise against the petitioner. In these circumstances, in the opinion of this court, the respondents are not justified in withholding the bank guarantees. - Decided in favour of appellant. - SPECIAL CIVIL APPLICATION NO.6847 of 2015 - Dated:- 23-10-2015 - MS. HARSHA DEVANI AND MR. JUSTICE A.G.URAIZEE, JJ. FOR THE PETITIONER : MR PARESH M DAVE, AD .....

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. The petitioner had applied for, and was granted a licence for a private bonded warehouse under section 58 of the Customs Act, 1962 (hereinafter referred to as the Act ). The petitioner, accordingly, had executed a warehousing bond in accordance with section 59 of the Act. The warehousing bond was also supported by two bank guarantees of ₹ 5,00,000/- each, one for the private bonded warehouse licence and the other as a transit bond security. 3. The private bonded warehouse of the petition .....

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cordingly, the petitioner no longer holds any licence for private bonded warehouse. According to the petitioner, it is, therefore, entitled to receive the bank guarantees lying with the customs authorities and, therefore, vide letter dated 22nd September, 2014 requested the respondents No.2 and 3 to release the bank guarantees. Certain correspondence ensued between the petitioner and the Department, which took a decision that it was not prudent to return the bank guarantees in view of three case .....

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operation and accordingly there is a stay against recovery of the disputed amounts of penalty in the petitioner s favour. Since the customs authorities have not released the bank guarantees, the petitioner has filed the present petition seeking a direction to the respondents No.2 and 3 to forthwith return the original bank guarantee papers of Bank Guarantee No.1996/22 dated 12th December, 1996 and Bank Guarantee No.2003/13 dated 29th December, 2003. 4. Mr. Paresh Dave, learned counsel for the p .....

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ers and, therefore, the respondents cannot hold back the bank guarantees. It was argued that the licences have been surrendered and the bond has been cancelled and an undertaking has been given by the petitioner in respect of future liabilities, under the circumstances, the bank guarantees which were given pursuant to the bond have to be returned. According to the learned counsel, on the basis of an anticipated liability, the bank guarantee cannot be retained by the respondents. It was contended .....

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recoverable or due from the appellant. Reliance was also placed upon the decision of the Madras High Court in the case of Arunachala Gounder Textile Mills Pvt. Ltd. v. Commissioner of Central Excise, Salem, 2013 (290) E.L.T. 499 (Mad.), and more particularly, paragraphs 4 and 13 thereof. It was submitted that in the aforesaid premises, the respondents are not justified in retaining the bank guarantees and the petition deserves to be allowed by granting the reliefs as prayed for by the petitioner .....

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ssistant Commissioner (Bond), Kandla addressed to the petitioner to point out that by an Order-in-Original passed by the Joint Commissioner of Customs House, Kandla, customs duty of ₹ 54,602/- and penalty of ₹ 90,000/- has been imposed upon the petitioner. It was pointed out that in relation to another Order-in-Original, penalty of ₹ 75 lakhs and in case of the third Order-in-Original, customs duty of ₹ 25,47,965/- and an equal amount of penalty had been confirmed against .....

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etitioner and, therefore, all the cases being linked to warehousing activities, the bank guarantees continue and having regard to the facts and circumstances of the case, the respondents have rightly refused to release the same. It was submitted that, therefore, appropriate directions be issued to the Tribunal to decide the appeals expeditiously, however, no case has been made out for releasing the bank guarantees. 6. In rejoinder, Mr. Paresh Dave, learned counsel for the petitioner invited the .....

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stay subject to the conditions as stated in the stay orders which have been duly complied with by the petitioner, however, the stay has not been granted on condition of furnishing bank guarantee. Under the circumstances, the respondents have no authority to retain the bank guarantees even on equitable grounds. Reference was made to the provisions of section 73 of the Customs Act, 1962 (hereinafter referred to as the Act ) on which reliance had been placed by the learned counsel for the responden .....

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petitioner and the annexures annexed thereto to point out that all the bonds executed by the petitioner under section 59 of the Customs Act have been duly cancelled by the Assistant Commissioner (Bond), Kandla. It was submitted that in these circumstances, the respondents are required to be directed to release the bank guarantees forthwith. 7. From the facts and contentions noted hereinabove, it emerges that the petitioner has surrendered the private bonded warehouse licence which has been acce .....

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ases came to be instituted against the petitioner which culminated into orders against the petitioner whereby the demand and/or the penalty came to be confirmed. The petitioner challenged the orders either before the first appellate authority or the Tribunal, as the case may be, and against the order passed by the first appellate authority, before the Tribunal. In all the three cases, the Tribunal has granted stay subject to pre-deposit of the amount stipulated in such orders, which the petition .....

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ected by the Tribunal to be deposited by way of predeposit. Moreover, once the licence has been surrendered and no amount is outstanding and payable by the petitioner towards the warehousing licence and the bonds executed by the petitioner have been cancelled, the respondents are not justified in retaining the bank guarantees. 8. Section 73 of the Act which is referred to hereinabove provides for Cancellation and return of warehousing bond . A perusal of the documents submitted by the petitioner .....

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