2011 (4) TMI 1143 - HC - Customs

Writ petition - petitioners seek a direction to the second respondent not to encash the bank guarantees until the statutory period of limitation prescribed for preferring appeals expires or if appeals have been preferred, until the stay petitions preferred in the appeals are disposed of - respondents submitted, on instructions, that in view of the directions issued by this Court in Ext.P1 judgment and Ext.P3 order, the second respondent will not encash the bank guarantees until the statutory period of limitation prescribed for filing appeals from Exts.P4 and P5 expires and will encash the bank guarantees only if the petitioners do not prefer appeals within the said period, writ petition disposed of

Summary

Issues:
1. Customs valuation of imported goods under Customs Act, 1962.
2. Demand for duty payment and bank guarantee invocation.
3. Statutory period for filing appeals and bank guarantee encashment.

Customs Valuation of Imported Goods under Customs Act, 1962:
The petitioners imported betel nuts through the Cochin Port, and the second respondent fixed the value of the goods at Rs.34 per kg under Rule 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with section 18(2) of the Customs Act, 1962. The second respondent demanded payment of duty based on these valuation orders. The petitioners had paid half of the amount and furnished a bank guarantee for the remaining half, following provisional assessment. The petitioners raised concerns regarding the valuation and the subsequent demand for duty payment.

Demand for Duty Payment and Bank Guarantee Invocation:
The second respondent demanded payment of Rs.6,42,600 and Rs.19,82,880 as duty through Ext.P4 and P5 orders, respectively. The petitioners, in response to the provisional assessment, paid half of the amount and provided a bank guarantee for the remaining sum. However, the petitioners objected to the first respondent taking steps to invoke the bank guarantees before the expiry of the statutory period for filing appeals from the valuation orders. This led to the petitioners seeking a direction to prevent the encashment of the bank guarantees until the prescribed appeal period lapses or until the disposal of any appeals filed.

Statutory Period for Filing Appeals and Bank Guarantee Encashment:
During the proceedings, the learned standing counsel for the respondents assured that the second respondent would refrain from encashing the bank guarantees until the statutory appeal period expires. The standing counsel confirmed that the bank guarantees would only be invoked if the petitioners fail to file appeals within the stipulated period. In light of this undertaking, the court disposed of the writ petition, directing the respondents to adhere to the assurances provided and extend the benefits of previous judgments to the petitioners concerning the bank guarantee invocation process.

This detailed analysis of the judgment from the Kerala High Court addresses the issues related to customs valuation of imported goods, duty payment demands, and the statutory period for filing appeals and bank guarantee encashment, providing a comprehensive overview of the legal proceedings and outcomes.