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Issues:
Department's appeal against Commissioner (Appeals) order regarding encashment of bank guarantee for allegedly not fulfilling export obligation under DEEC Scheme. Analysis: The case involved an appeal by the Department against the order of the Commissioner (Appeals) regarding the encashment of a bank guarantee by the Department even though the export obligation under the DEEC Scheme had been fulfilled by the respondent. The respondent had imported duty-free goods under the DEEC Scheme and executed a bond with a bank guarantee to fulfill the export obligation by a certain date. The Export Obligation Discharge Certificate (EODC) was issued by the DGFT and submitted to the Customs authorities. However, the Department still pursued the bank guarantee and encashed it, leading to a refund claim by the respondent. The Commissioner (Appeals) found in favor of the respondent, highlighting that the export obligation fulfillment certificate was issued late by the DGFT, and all required documents were submitted to Customs before the bank guarantee was encashed. The responsibility of monitoring export obligations falls under the DGFT, and the encashment of the bank guarantee was deemed unwarranted and unauthorized based on the facts of the case. The recovery was made based on the bond without following the provisions of the Customs Act, making the encashment improper. The judge carefully considered the submissions and records, concluding that the decision of the Commissioner (Appeals) to grant the refund was legal and proper. Since the bank guarantee was encashed erroneously even after the export obligation was fulfilled, it was deemed appropriate to return the money to the respondent. Therefore, the appeal by the Department was rejected, upholding the decision of the Commissioner (Appeals) in favor of the respondent.
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