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2015 (12) TMI 1435 - GUJARAT HIGH COURT

2015 (12) TMI 1435 - GUJARAT HIGH COURT - 2016 (332) E.L.T. 676 (Guj.) - 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 .....

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yed. - If the respondents are permitted to retain the bank guarantees, it 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 ar .....

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rs passed against the petitioner in the three proceedings stand stayed by 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 A .....

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e court at length, the matter was heard finally at the admission stage. 2. 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 .....

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ing the customs control over the said warehouse/godown in April, 2014. Accordingly, 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 th .....

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ions by passing three separate stay orders. Such stay orders are still in 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 .....

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ribunal and that the proceedings before the Tribunal are unconnected matters 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, t .....

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re the appellate authority, it cannot be said that any amount has become 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 deser .....

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eference was made to the communication dated 27th November, 2014 of the Assistant 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 S .....

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icating authority or the first appellate authority are in favour of the petitioner 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 re .....

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ncashed the same. It was further submitted that the Tribunal has granted 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 ) o .....

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tention of the court was invited to the additional affidavit filed by the 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 .....

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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 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 t .....

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he 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. 8. Section 73 of the Act which is referred to hereinabove provides for Cancellation and return of .....

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