2021 (3) TMI 539 - HC - Customs

Seeking return of bank guarantee and bond executed at the time of provisional release of the goods as well as for refund of pre-deposit made - Respondents in their reply affidavit have taken the stand that department has filed civil appeal before the Supreme Court against the order of CESTAT and that it has got a good case on merit. Therefore, it would not be appropriate to return bond and bank guarantee to the petitioner at this stage - Petitioner has filed rejoinder affidavit refuting the contention of the respondents and contending that mere filing of the civil appeal in the Supreme Court cannot be a ground for not returning the bond and bank guarantee. HELD THAT - The respondents should return the bonds and bank guarantees of the petitioner within a period of three months from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues:
1. Return of bank guarantee after customs dispute resolution.

Analysis:
The judgment by the High Court of Bombay concerned two writ petitions seeking the return of bank guarantees following a customs dispute resolution. The petitioners had imported goods and faced a demand cum show cause notice due to alleged undervaluation. The Additional Commissioner of Customs ordered confiscation of the goods, imposing fines and penalties. The petitioners appealed, and the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal, classifying the goods under a different category. Subsequently, the petitioners sought the return of the bank guarantees and bonds. Respondent No.4 sanctioned a partial refund but did not address the return of the bank guarantee and bond, citing a pending civil appeal before the Supreme Court. The respondents argued that they had a strong case on merit for the appeal. The petitioners contended that the mere filing of a civil appeal should not hinder the return of the bank guarantee and bond.

The High Court reviewed the details of the bank guarantees and the history of the case, noting the delay in proceedings due to the Covid-19 pandemic. It was revealed that the department had filed a civil appeal against the CESTAT order. However, the High Court directed the respondents to return the bonds and bank guarantees to the petitioners within three months, unless a stay order was obtained from the Supreme Court. The judgment emphasized that if no stay order was obtained, the return of the bonds and bank guarantees should proceed within the specified timeframe. Consequently, both writ petitions were disposed of by the High Court of Bombay.