2022 (9) TMI 1404 - HC - Customs

Maintainability of petition - availability of alternative remedy - Seeking provisional release of the seized vehicle - service of SCN - seizure memo is issued by the proper Officer or not - HELD THAT - The petitioner therein was directed to pay 50% of the differential duty and execute the Bank Guarantee in respect of other 50%, subject to the conditions imposed by this Court in the said order. Accordingly, in the absence of any justifiable material produced by the petitioner to establish as to how the 4th respondent was entitled to demand the Bank Guarantee in a sum of Rs.5,68,16,000/- from the petitioner, the impugned condition in this regard deserves to be quashed. Insofar as the contention urged by the respondents that the petition is not maintainable in view of alternative remedy available by way of an appeal under Section 128 of the Customs Act is concerned, having regard to the findings above that the impugned condition directing furnishing of Bank Guarantee is illegal, arbitrary and without jurisdiction or authority of law, merely because alternative remedy is available, the said circumstance cannot be made the basis to come to the conclusion that the present petition is not maintainable. Petition allowed.

Summary

Issues:
1. Quashing of Seizure Memo dated 13.08.2021
2. Challenge to Provisional Release Order dated 25.07.2022
3. Jurisdiction of the 4th Respondent in directing Bank Guarantee
4. Comparison of applicable duty and Bank Guarantee amount
5. Legal basis for Bank Guarantee requirement
6. Maintainability of petition despite alternative remedy available
7. Validity of impugned condition No.2 in the provisional release order

Analysis:
1. The petitioner sought to quash the Seizure Memo dated 13.08.2021, arguing it was not issued by the proper Officer under the Act and lacked jurisdiction. The Court examined the contentions and material on record. The petitioner challenged the Provisional Release Order dated 25.07.2022 issued by the 4th Respondent, claiming it was arbitrary and bad in law. The Court considered the arguments presented by both parties.

2. The petitioner's counsel highlighted that the 4th Respondent lacked jurisdiction or authority in demanding a Bank Guarantee of Rs.5,68,16,000, which was deemed illegal, arbitrary, and without basis. Reference was made to a Show Cause Notice to support the argument that the duty payable by the petitioner was significantly lower than the demanded Bank Guarantee amount. The petitioner's counsel relied on a previous court decision to strengthen the argument for quashing the impugned condition.

3. In response, the respondents' counsel defended the 4th Respondent's decision, stating it was justified to impose the Bank Guarantee condition. The Court noted discrepancies between the duty amount and the Bank Guarantee sum, emphasizing the lack of quantification for demanding the Bank Guarantee. The Court referenced a previous case where a similar issue was addressed, leading to a modified order for payment and Bank Guarantee.

4. The Court emphasized the disparity between the duty payable and the Bank Guarantee amount, concluding that the 4th Respondent's demand lacked justification. The Court modified the impugned condition, ordering the petitioner to pay 50% of the duty amount and furnish a Bank Guarantee for the remaining 50%, subject to renewal until final adjudication. Upon compliance, the 4th Respondent was directed to release the subject car promptly.

5. Regarding the maintainability of the petition despite an alternative appeal remedy, the Court held that the availability of an alternative remedy did not render the petition non-maintainable. The Court's decision was limited to the validity of the impugned condition related to the Bank Guarantee, without delving into other contentions at that stage. Ultimately, the Court allowed the petition, modifying the Bank Guarantee requirement and directing the release of the subject car upon compliance.