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Cus - As goods have already been disposed of by appellant, Revenue cannot be prevented from encashing BG: CESTAT

By TIOL News Service

MUMBAI, SEPT 16, 2016: THE applicant has filed an application seeking to prevent revenue from encashing bank guarantee executed by them.

They are in appeal against an o-in-o which directed encashment of two bank guarantees totaling to Rs.70,53,000/- executed by the applicant.

It is informed that out of the differential duty of Rs.29,33,56,787/- confirmed against the appellant, they have already deposited Rs.2,20,01,760/- and, thus complied with the requirement of pre-deposit u/s 129E of the Customs Act, 1962.

The applicant also relies on the Circular No. 984/8/2014-CX dated 16/09/2014 clarifying that apart from the payments mandated u/s 129E of the Customs Act, no proceedings should be initiated against the assessee for any further payment.

It is informed that they had filed a Writ Petition in Bombay High Court for release of the export consignments and which were released provisionally (and exported thereafter) after obtaining a bond and bank guarantee.

The AR argued that the export goods have been confiscated by the impugned order and an option has been given for redemption of the goods on payment of fine of Rs.5.00crores.Inasmuch as,in the circumstances, since the goods have already been exported, the appellants have no option but to pay redemption fine as they have already disposed of the provisionally released goods.

Reliance is placed on the decision in Dee Pearls (India) Pvt. Ltd. - 2012-TIOL-293-CESTAT-MUM.

The Bench extracted paragraph 4 of the cited Circular and observed that the same only prevents the recovery of the balance amount of duty and penalty and does not talk about the recovery of other dues.

Adverting to the Tribunal decision (supra) and extracting paragraph 3 of the same, the CESTAT, while rejecting the application, further observed -

"5.2 It is seen that the bond has been executed to safeguard any fine that may be adjudged in lieu of confiscation of the provisionally released goods. The goods have already been disposed of by the appellant and there cannot be any provision to return the goods. In these circumstances relying on the decision of the Tribunal in the case of Dee Pearls (India) Pvt. Ltd. (supra), the application is rejected."

(See 2016-TIOL-2428-CESTAT-MUM)


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