Tribunal Grants Stay on Customs Orders, Allows New Bank Guarantees for Duty & Penalty

The Tribunal granted a stay against the Commissioner of Customs' order for appropriation of duty, redemption fine, and penalty, upon the applicants furnishing a new bank guarantee. The applicants, facing hardship from full duty recovery, proposed a fresh guarantee for the fine and penalty. The Tribunal accepted this, directing the return of the draft obtained from the bank. Additionally, in a separate matter concerning diversion of imported stainless steel coils/sheets, the Tribunal allowed a stay against the confiscation order, pending submission of a new bank guarantee to cover the fine and penalty.

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Issues:
1. Stay application against the order of the Commissioner of Customs for appropriation of duty, redemption fine, and penalty.
2. Allegation of diversion of imported stainless steel coils/sheets cleared under DEEC scheme.
3. Plea for restraining the department from encashing the bank guarantee for fine and penalty.

Analysis:
1. The stay application was filed concerning the order of the Commissioner of Customs, which directed the appropriation of a sum from duty deposited, recovery of redemption fine, and penalty from the bank guarantee. The applicants sought a stay on the recovery pending the appeal's disposal, citing undue hardship due to full duty recovery already made. They proposed to furnish a fresh guarantee for the fine and penalty. The Tribunal accepted this plea, granting a stay against the impugned order upon furnishing the new bank guarantee, directing the return of the draft obtained from the bank.

2. The issue revolved around the import of stainless steel coils/sheets under the DEEC scheme with an actual user condition, allegedly diverted to the local market without utilizing them for manufacturing export products. The Commissioner's order confiscated the goods, demanded duty payment, and imposed a penalty for violating the scheme's conditions. The applicants contended they had a prima facie case and had deposited the duty during provisional release, requesting the department not to encash the bank guarantee for the fine and penalty.

3. After hearing both sides, the Tribunal acknowledged the applicants' request to furnish a fresh bank guarantee to cover the fine and penalty instead of a deposit until the appeal's resolution. Consequently, the Tribunal granted a stay against the impugned order upon submission of the new bank guarantee, instructing the department to return the draft acquired from the bank upon compliance with this condition.

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