2009 (3) TMI 106 - HC - Customs

Return of Bank Guarantee and payment of interest - Bank Guarantee tendered in compliance with an interim order made by the Apex Court in the first round of proceedings has expired and has not been re-validated. Therefore, in so far as Revenue is concerned, in effect, the papers of such Bank Guarantee are not having any value and in the circumstances Revenue is directed to part with the papers of expired Bank Guarantee and hand them over to the petitioners within a period of ten days from today, namely; on/or before 23-3-2009.

Summary

Issues:
1. Petition for the return of a Bank Guarantee and payment of interest.
2. Failure of the Commissioner to respond to requests for the return of the Bank Guarantee.
3. Dispute related to the expired Bank Guarantee and its value.
4. Request for the petitioners to furnish an undertaking.

Issue 1: Petition for the return of a Bank Guarantee and payment of interest.
The petition sought a Writ of Mandamus for the return of a Bank Guarantee and payment of interest at 12% per annum. The petitioners had succeeded in proceedings under the Customs Act, leading to the release of confiscated gold bars upon furnishing a Bank Guarantee of Rs. 4.00 Crores. Subsequent appeals and remand by the Appellate Tribunal resulted in the confiscation being set aside. The petitioners requested the return of the Bank Guarantee on 9-6-2008, followed by several communications due to non-response by the Commissioner.

Issue 2: Failure of the Commissioner to respond to requests for the return of the Bank Guarantee.
Despite repeated requests starting from 9-6-2008, the Commissioner did not respond to the petitioners' communications regarding the return of the Bank Guarantee. This lack of response led to the filing of the present petition seeking the return of the Bank Guarantee papers, which had expired by the time of the hearing.

Issue 3: Dispute related to the expired Bank Guarantee and its value.
The Bank Guarantee furnished as per the interim order by the Apex Court had expired and had not been re-validated. The Revenue argued that the papers of the expired Bank Guarantee had no value. The court directed the Revenue to return the papers of the expired Bank Guarantee to the petitioners within ten days, emphasizing that the expired guarantee had no value and should be handed over.

Issue 4: Request for the petitioners to furnish an undertaking.
The Revenue requested the petitioners to furnish an undertaking to satisfy any future demand if the Revenue succeeded in the pending tax appeals before the High Court. However, the court found no relevance in such a request to the present petition and noted that the two sets of proceedings were independent and separate. The court allowed the petition in favor of the petitioners, with no order as to costs, directing the Revenue to return the papers of the expired Bank Guarantee within ten days.