2014 (5) TMI 632 - AT - Customs

Denial of refund - Encashment of bank guarantee - applicant has got the unconditional waiver of pre-deposit - Held that - applicant has already granted unconditional waiver of pre-deposit of the dues adjudged in the impugned order, therefore, the encashment of Bank Guarantee is not warranted. In view of this observation, we direct the concerned Commissioner to refund the amount of Rs. 50 lakhs to the applicant, which was taken by them by encashing Bank Guarantee executed by the applicants at the time of provisional release of the goods - Decided in favour of assessee.

Summary

Issues: Application for consequential relief following a Stay Order granting unconditional waiver of pre-deposit; Encashment of Bank Guarantee during pendency of stay application.

Analysis:

1. Application for Consequential Relief: The applicant filed a miscellaneous application seeking consequential relief after a Stay Order (Nos. S/401-403/12/CSTB/C-II) granted them unconditional waiver of pre-deposit. The applicant had appealed against an order dated 30-4-2010 before the Tribunal. During the pendency of the stay application, a Bank Guarantee of Rs. 50 lakhs, executed by the applicant at the time of provisional release of the goods, was encashed by the department through a letter dated 23-7-2010. The applicant, having obtained unconditional waiver of pre-deposit, claimed entitlement to a refund of the encashed amount of Rs. 50 lakhs.

2. Decision on Consequential Relief: The Tribunal considered the submissions of the applicant's counsel and reviewed the records. It noted that since the applicant had already been granted unconditional waiver of pre-deposit as per the impugned order, the encashment of the Bank Guarantee was deemed unnecessary. Consequently, the Tribunal directed the concerned Commissioner to refund the amount of Rs. 50 lakhs to the applicant, which had been encashed by the department during the pendency of the stay application. The Commissioner was instructed to comply with this order within 7 days of its communication.

3. Final Directive: The Tribunal concluded by ordering that the decision be given Dasti, indicating that the order was dictated and pronounced in court. This comprehensive judgment by the Appellate Tribunal CESTAT Mumbai, delivered by Member (J) and Member (T), highlights the importance of ensuring consequential relief in cases where unconditional waiver of pre-deposit has been granted and addresses the issue of encashment of Bank Guarantees during the pendency of stay applications.