2020 (6) TMI 212 - HC - Customs

Advance Authorization Scheme - execution of Bank Guarantee - deemed exports - HELD THAT - The recovery proceedings by the respondents shall be kept in abeyance for a period of four weeks from today. The petitioner is granted four weeks time to approach the jurisdictional competent authorities before the State of Karnataka for appropriate remedy. It is made clear that if the petitioner fails to avail this opportunity within a time frame stipulated by this Court, it is open to the respondents to take appropriate action in the manner known to law. Petition disposed off.

Summary

Issues:
1. Jurisdiction to seek remedy against recovery proceedings.
2. Mandamus to prevent payment against a bank guarantee.

Analysis:
1. The petitioner, a manufacturer of corrugated carton boxes, sought relief through a writ petition against recovery proceedings initiated by the respondents. The petitioner had fulfilled their export obligation under an Advance Authorization/Licence but faced challenges with the encashment of a bank guarantee. The Court noted that the appropriate remedy against recovery proceedings lies with the competent jurisdictional authorities of Karnataka State. Both parties agreed that the petitioner should be given time to approach the relevant authorities for a remedy. Consequently, the Court disposed of the petition, directing the recovery proceedings to be kept in abeyance for four weeks to allow the petitioner to seek appropriate relief from the authorities in Karnataka.

2. The main issue in the case was the petitioner's request for a mandamus to prevent the second respondent from making payment against a bank guarantee. Despite the petitioner's concerns, the Court did not delve into the merits of the case. Instead, the Court granted the petitioner four weeks to approach the competent authorities in Karnataka for a remedy. The Court emphasized that failure to avail this opportunity within the specified timeframe would allow the respondents to take appropriate legal action. Ultimately, the Court did not award any costs in the matter, and the connected Miscellaneous Petition was closed.

In conclusion, the judgment highlighted the importance of seeking remedies from the appropriate jurisdictional authorities and provided the petitioner with a timeframe to address their concerns regarding recovery proceedings and the bank guarantee issue.