1997 (10) TMI 75 - HC - Central Excise

Summary

Issues:
1. Denial of duty-free clearance by Assistant Commissioner of Customs
2. Failure to implement order passed by Commissioner of Customs (Appeals)
3. Non-discharge of bank guarantees by Customs authorities
4. Dispute over validity and release of bank guarantee

Analysis:

Issue 1: Denial of duty-free clearance by Assistant Commissioner of Customs
The petitioner's concerns were denied duty-free clearance by the Assistant Commissioner of Customs for a consignment covered by a valid license. Despite fulfilling export obligations and providing technical data, the Assistant Commissioner issued a query memo seeking to deny clearance, causing financial burden to the petitioner.

Issue 2: Failure to implement order passed by Commissioner of Customs (Appeals)
After the Commissioner of Customs (Appeals) allowed the petitioner's appeal and directed duty-free clearance, the Assistant Commissioner failed to implement the order, leading to the petitioner having to execute bank guarantees for multiple consignments. The refusal to act upon a higher authority's order caused financial strain on the petitioner.

Issue 3: Non-discharge of bank guarantees by Customs authorities
The Customs authorities, specifically the 3rd and 4th respondents, failed to discharge the bank guarantees even after the Tribunal dismissed their stay application. Despite requests and representations, the bank guarantees remained undischarged, causing ongoing financial implications for the petitioner.

Issue 4: Dispute over validity and release of bank guarantee
The respondents argued that keeping the bank guarantee valid until the appeal is decided is necessary to secure potential duty recovery. However, the petitioner highlighted that maintaining the bank guarantee blocks their funds, even if they succeed in the appeal. The Court ruled in favor of the petitioner, directing the release of the bank guarantee upon executing a bond equal to the amount.

In conclusion, the High Court held in favor of the petitioner, directing the release of the bank guarantee upon executing a bond. The Court emphasized the unjustifiable withholding of the bank guarantee by the respondents, especially after the appeal was allowed and the Tribunal refused to grant a stay of the order. The judgment aimed to alleviate the financial burden on the petitioner caused by the non-implementation of favorable orders and ongoing disputes over bank guarantees.