2018 (4) TMI 170 - HC - Customs

Furnishing of Bank Guarantee - release of seized vessel - Held that - in the facts and circumstances of the case and only not to cause a breach of the contractual obligations as also to allow the petitioner to argue its case on merits as and when a show cause notice is issued, the seized vessel can be released. Each of these undertakings and reproduced are accepted as undertakings given to this court. In these circumstances, we modify the order of the tribunal. We modify it only to the extent of furnishing the bank guarantee in the sum of ₹ 10 crores - bank guarantee need not be furnished, but the vessel should be released provisionally to the petitioner on the express undertakings given to this court. Petition disposed off.

Summary

Issues:
Impugning an interim order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding the imposition of a bank guarantee.

Analysis:
1. The petitioner challenged an interim order of CESTAT directing the furnishing of a bank guarantee of ?10 crores, covering differential duty, redemption fine, and penalties. The petitioner argued that the seizure of the vessel would affect the operations of the Oil and Natural Gas Commission, as the vessel was to be used for offshore exploration operations. The petitioner contested the valuation of the vessel at ?41.45 crores by the Deputy Commissioner, deeming it arbitrary and excessive.

2. The High Court acknowledged the reluctance to interfere in interim orders but found the writ petition maintainable due to the impact on the Oil and Natural Gas Commission's operations. After extensive hearings, the court considered the arguments presented by both parties. The court noted the challenge by the Revenue against certain tribunal orders in the Supreme Court and required the petitioner to file an affidavit undertaking the vessel's use only for contractual obligations with the ONGC and not to move it out of Indian jurisdiction.

3. Upon the petitioner furnishing the required undertaking, the court accepted the undertakings and modified the tribunal's order to release the vessel provisionally without the need for the bank guarantee. The court clarified that the modification was specific to this case and not a precedent for similar cases. The writ petition was disposed of without expressing any opinion on the case's merits, with an assurance from the respondents that the show cause notice would be adjudicated in accordance with the law.

This detailed analysis covers the issues involved in the legal judgment, highlighting the arguments, considerations, and final decision made by the High Court in the matter.