2009 (6) TMI 599 - HC - Customs

Release of goods - bank guarantee - assessee to furnish cash security Held that - furnish cash security, for all practical purposes, tantamounts to directing the assessee to make the payment of the disputed duty - duty to which the assessee has been assessed would be fully secured by furnishing of an unconditional bank guarantee - bank guarantee shall be an unconditional bank guarantee and the same shall be kept renewed - failing which it will be open to the respondents to invoke the bank guarantee - goods be released within 48 hours from the time of furnishing of the bank guarantee

Summary

Issues:
1. Direction for filing of affidavits and interim order for release of goods subject to securing duty.
2. Direction to furnish cash security by Assistant Commissioner of Customs.
3. Interpretation of the court's direction regarding security for releasing goods.
4. Modification of the order to require a bank guarantee instead of cash security.
5. Filing of affidavits and listing of the matter for further proceedings.
6. Keeping all questions open, including the maintainability of the writ application.

Analysis:
1. The High Court initially directed the filing of affidavits and passed an interim order for the release of goods upon securing the duty assessed. The Commissioner of Customs was instructed to release the goods within 48 hours upon the petitioners providing security to the satisfaction of the Commissioner.

2. Subsequently, the Assistant Commissioner of Customs directed the petitioners to furnish cash security against the bill of entry. The court noted that requiring cash security effectively meant demanding payment of the disputed duty, which was not in line with the court's intention.

3. The court clarified that the security should be in the form of an unconditional bank guarantee approved by the Commissioner of Customs. The terms and conditions of the bank guarantee had to be satisfactory to the Commissioner, who could also consider alternative forms of security if deemed appropriate.

4. The modified order required the petitioner to furnish a bank guarantee for the entire assessed amount, leading to the release of the goods within 48 hours of providing the bank guarantee. The bank guarantee had to be unconditional, renewed before expiry, and subject to invocation by the authorities upon non-renewal.

5. The court directed the filing of affidavits-in-opposition and reply within specified timelines, scheduling a special hearing for further proceedings. The order dated 17th June, 2009, was modified as per the new terms regarding the security for releasing the goods.

6. Finally, the court kept all questions open, including the maintainability of the writ application, and instructed all parties to act based on a signed copy of the order. The judgment provided detailed guidance on the appropriate form of security for releasing goods and set the stage for ongoing legal proceedings.