9911796707
TMI Blog2016 (5) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... uent to the expiry of the period sanctioned by the BIFR, i.e., ten years from March 31, 2008. The authorities will be at liberty to take such steps against the petitioners in respect of its obligations under such licence if the petitioners have failed to discharge such obligations. Security for the event of default - in fulfilling the obligations under the licence within the extended time - Petitioner submitted that relevant circulars of the department allow the petitioner to furnish security by way of a bank guarantee. Also the bank guarantee in question has been renewed on May 3, 2016 and is in terms of the General Exemption No. 56 and the Circular No. 52/95, the same should be allowed to be accepted. Moreover, as the petitioner being a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then the public money stands to be jeopardized. Such a scenario is not healthy. A private party should not be allowed to do its business on the strength of public money. Therefore, the petitioner will deposit a cash security with the authorities as security for the subject licence. - Petition disposed of X X X X Extracts X X X X X X X X Extracts X X X X ..... o time. He has also pointed out that, subsequent to the last hearing the petitioner has expended substantial amounts to obtain a fresh bank guarantee incorporating a clause that such bank guarantee shall remain in full force upto March 31, 2019. He has submitted that, such period is sufficient to cover the claim of the authorities. Learned Advocate for the respondent nos. 1 to 5 has submitted that, the export licence had expired prior to the policy spoken of by the petitioner in the writ petition. The authorities have also initiated proceedings for recovery of certain claims against the first petitioner. I have considered the rival contentions of the parties and the materials made available on record. A reference before the BIFR being BI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent allow the petitioner to furnish security by way of a bank guarantee. The relevant portion of the General Exemption No. 56 issued under Section 25(1) of the Customs Act, 1962 is as follows:- "Concessional rate of duty for imports under EPCG Scheme. - In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods as specified in the Table annexed hereto from so much of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as is in excess of the amount calculated at the rate of 15% ad valorem and whole of the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector Undertaking may be exempted from Bank Guarantee. The bond and Bank Guarantee should be kept alive for the full period of the export obligation plus one year i.e. for a total six years for import at 15 % under E.P.C.G. Scheme and for a period of 9 years for import at zero duty. …………………………………………………………………………………" Learned Senior Advocate for the petitioner has submitted that, since the bank guarantee in question has been renewed on May 3, 2016 and is in terms of the General Exemption No. 56 and the Circular No. 52/95, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties to require such form and manner of security as it deemed necessary. Bank guarantee is one of them. That does not mean that other forms of security such as cash cannot be asked for or directed to be furnished. The plea that since the petitioner is before the BIFR therefore the direction to put in cash security instead of bank guarantee would be harsh and burdensome upon the petitioner is misplaced. A reference to the BIFR in respect of a company is in relation to the liabilities accruing up to the end of the financial year for which such reference has been made. Moreover, a commercial bank usually requires full security in cash in terms of the relevant guidelines of the Reserve Bank of India for it to issue a bank guarantee. The petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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