2020 (6) TMI 96 - HC - Customs

Deemed export - supply to SEZ unit - recovery of customs duty - Forbearing the 2nd respondent from making payment against the bank Guarantee - the learned counsel for the petitioner as well as the learned Standing Counsels appearing for the respondents fairly submitted that the remedy available to the petitioner as against recovery proceedings is only before the competent jurisdictional authorities of Karnataka State and hence, the petitioner may be given reasonable time to approach the authorities concerned for appropriate remedy - HELD THAT - The petition is disposed off with the direction 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.

Summary

Issues:
1. Jurisdictional authority for recovery proceedings.
2. Mandamus seeking forbearance from making payment against a bank guarantee.

Analysis:
1. The petitioner, a manufacturer of corrugated carton boxes, had executed a bank guarantee for a specific export obligation. After fulfilling the obligation, the petitioner faced a demand to encash the bank guarantee, leading to the filing of a writ petition seeking a mandamus to prevent the payment against the guarantee. The court noted that the appropriate remedy against recovery proceedings lies with the jurisdictional authorities of Karnataka State. Both parties acknowledged this fact, and the court disposed of the petition without delving into the merits of the case.

2. The court ordered that the recovery proceedings by the respondents be stayed for four weeks to allow the petitioner time to approach the competent authorities in Karnataka for a suitable remedy. Failure to do so within the stipulated time frame would empower the respondents to take necessary legal actions. This decision highlights the importance of adhering to the correct jurisdiction for seeking remedies related to recovery proceedings, ensuring that the petitioner exhausts the available legal avenues before the appropriate authorities.