2011 (12) TMI 529 - AT - Customs

Release of detained goods - waiver of bank guarantee of equal amount - appellant s case is that they had given earlier the bank guarantee for ₹ 2 crores for provisional release of earlier export consignment - Held that - the appellant had already given a bank guarantee of ₹ 2 crores to cover the earlier three consignments. The exports are being made under DEPB scheme. Even if the Revenue s case is proved the consequence of the same would be denial of said DEPB. The Revenue has already drawn samples from the present consignment, in which case provisional release of the same would not cause any adverse affect to the Revenue s case - the earlier bank guarantee of ₹ 2 crores executed by the appellant should be considered as sufficient to cover present consignment also considering the quantum of reasonable fine and penalty that can be imposed in this case. Therefore, there is no need to give further bank guarantee as directed by the Commissioner - appeal allowed - decided in favor of appellant.

Issues:
1. Release of bank guarantee for earlier consignments.
2. Waiver of condition of furnishing bank guarantee for a new consignment.
3. Justifiability of seeking a bank guarantee for releasing goods.
4. Applicability of Board's Circular on provisional release of goods.
5. Consideration of overall facts and circumstances for bank guarantee requirement.

Release of Bank Guarantee for Earlier Consignments:
The appellant, a Govt. approved export house, filed three shipping bills for fabric exports valued at Rs. 9.25 crores. Investigations were initiated due to doubts about the fabric value, leading to the appellant executing a bond with a bank guarantee of Rs. 2 crores for provisional export. The Commissioner rejected the appellant's plea to release the bank guarantee and waiver of the bank guarantee condition for a new shipment. The appellant argued that they received full remittance for the earlier exports and had pending DEPB claims. The Tribunal noted the appellant's compliance with the bond requirement for the previous consignments and the pending DEPB claims, concluding that the earlier bank guarantee should suffice for the new consignment, thus rejecting the need for an additional bank guarantee.

Waiver of Condition of Furnishing Bank Guarantee for a New Consignment:
The appellant filed a new shipping bill detained for investigation, seeking a waiver of the bank guarantee condition. The Commissioner's order required a bank guarantee equal to 25% of the consignment value. The appellant contended that such a requirement was unjustified, given their track record as an export house and the pending DEPB claims. The Tribunal agreed with the appellant, finding the bank guarantee condition harsh and unjust. They directed the appellant to furnish a bond equal to the goods' value, ensuring the existing bank guarantee covered the new shipment, and ordered the provisional release of the consignment without a further bank guarantee.

Justifiability of Seeking a Bank Guarantee for Releasing Goods:
The Revenue insisted on a bank guarantee for releasing goods, citing suspicions of misdeclaration and the need for further investigation. The appellant argued against the necessity of a bank guarantee, highlighting the adverse effects on their business operations, including demurrage costs. The Tribunal considered the Revenue's concerns but emphasized the potential negative impacts of prolonged detention on export orders and port congestion. They concluded that the existing bank guarantee sufficed, given the circumstances, and directed the appellant to provide a bond instead of an additional bank guarantee for the new consignment.

Applicability of Board's Circular on Provisional Release of Goods:
Both parties referred to the Board's Circular on provisional release of goods in cases of suspected misdeclaration. While the Revenue supported the Commissioner's decision based on the Circular's guidelines, the appellant argued for a more lenient approach, citing their compliance with previous bond requirements and pending DEPB claims. The Tribunal considered the Circular's principles but ultimately found the existing bank guarantee satisfactory, aligning with the appellant's position on the waiver of an additional bank guarantee for the new consignment.

Consideration of Overall Facts and Circumstances for Bank Guarantee Requirement:
In analyzing the case holistically, the Tribunal acknowledged the appellant's fulfillment of bond requirements for earlier consignments, pending DEPB claims, and the potential impact of prolonged detention on business operations. They deemed the Commissioner's directive for an additional bank guarantee excessive, given the circumstances. The Tribunal, after evaluating the facts and circumstances, ruled in favor of the appellant, directing them to furnish a bond equal to the goods' value and maintaining the existing bank guarantee's validity for the new consignment, thereby rejecting the need for an additional bank guarantee and upholding the appellant's plea for provisional release.

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