Provisional release of export goods: existing bank guarantee held sufficient, while additional security was found unnecessary.

Provisional release of detained export goods required only adequate security, not an additional bank guarantee of 25% of the consignment value, where samples had already been drawn and the likely exposure was limited to fine and penalty. The existing bank guarantee was treated as sufficient security for the present consignment, so release was allowed on a bond while keeping that guarantee alive. The request to refund or discharge the earlier bank guarantee was rejected.

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Issues: Whether the appellant was required to furnish an additional bank guarantee of 25% of the value of the export consignment for provisional release of the goods, and whether the earlier bank guarantee of Rs. 2 crores could be treated as sufficient security for the present consignment.

Analysis: The goods had been detained only for investigation and samples had already been drawn. The exports were under the DEPB scheme, so any adverse finding would mainly affect the DEPB benefit rather than cause immediate loss to the Revenue. The Board's circular also recognised that prolonged detention of export goods causes delay, cancellation risk, congestion, and demurrage. In the facts of the case, the earlier bank guarantee of Rs. 2 crores already furnished for the earlier consignments was considered adequate security to cover the present consignment as well, in view of the likely fine and penalty exposure. At the same time, the request for refund of the earlier bank guarantee was not accepted.

Conclusion: The additional bank guarantee of 25% was held to be unnecessary and the appellant was entitled to provisional release of the goods on furnishing a bond and keeping the existing bank guarantee alive. The prayer for release of the earlier bank guarantee was rejected.

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