2010 (1) TMI 509 - HC - Customs

Forfeiture of bank guarantee in case of export Due to the change of fabric from cotton to rayon - applied for grant of extension of time - it was refused by order on the ground that the confirmation of the submission of the 30% bank guarantee sent by the AEPC, Delhi had to be made available to the Madras office. Since the instructions were unable to be sent by the AEPC, Delhi to its Madras office, the Petitioner was denied the right to ship the garments against the licence granted by the AEPC. Ultimately AEPC forfeited bank guarantee amount- Held that - the non-release of the quota by the Petitioner could be attributed to the non-grant of time extension to which the Petitioner was otherwise entitled - Petitioner will be refunded the balance of the forfeited EMD in the sum of Rs. 46,627/- together with interest at 12%.

Summary

Issues:
1. Forfeiture of bank guarantee amount due to failure to export.
2. Claim for refund of EMD and interest.
3. Maintainability of the claim in a petition under Article 226.
4. Disputed claims for EMD related to transactions from 1985 and 1989.
5. Claim for damages and compensation.

Analysis:
1. The petitioner sought a mandamus for payment of a specific sum with interest, related to the export of garments to the USA under a government scheme. Due to issues with fabric change and administrative errors, the petitioner faced forfeiture of a bank guarantee amount, leading to a complaint before the NCDRC challenging the forfeiture.

2. The petitioner's claim included various components such as EMD refund, interest, duty drawback, and compensation. Citing previous judgments, the petitioner argued for the refund based on errors by the AEPC and the entitlement to various amounts related to the export transactions.

3. The respondent contended that the claim was not maintainable under Article 226, referring to legal precedents. However, the court found merit in the petitioner's case, especially considering a previous judgment in a similar matter where the petitioner was allowed relief for the forfeited bank guarantee amount.

4. Disputed claims for EMD dating back to transactions in 1985 and 1989 were raised, with the petitioner providing evidence for these claims. The court found these claims belated and involving disputed questions of fact, not suitable for resolution in the present writ petition.

5. The petitioner's claim for damages and compensation was deemed vague and inadequately pleaded. The court held that such claims could not be examined under Article 226, and no case was made for entertaining the claim for imposed costs.

In conclusion, the court disposed of the writ petition by directing the refund of the balance of the forfeited EMD with interest, acknowledging the petitioner's entitlement to relief for the errors and administrative failures that led to the forfeiture of the bank guarantee amount.