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of <h1>Court Upholds Bank Guarantee for Redemption Fine, Denies Application Despite Circular</h1> <h3>Hindustan Platinum Pvt. Ltd. Versus Commissioner of Cus., Mumbai</h3> The court rejected the application to prevent the encashment of a bank guarantee by M/s. Hindustan Platinum Pvt. Ltd., despite their reliance on Circular ... Pre-deposit - Section 129E of the Customs Act, 1962 - Circular No. 984/8/2014-CX, dated 16-9-2014 - Held that: - It can be seen that Para 4 of the said circular only prevents the recovery of the balance amount of duty and penalty and does not talk about the recovery of other dues - It is seen that the bond has been executed to safeguard any fine that may be adjudged in lieu of confiscation of the provisionally released goods. The goods have already been disposed of by the appellant and there cannot be any provision to return the goods - application rejected. Issues:1. Application to prevent encashment of bank guarantee.2. Interpretation of Circular No. 984/8/2014-CX.3. Confiscation of export goods and redemption fine.4. Relevance of Tribunal's decision in Dee Pearls (India) Pvt. Ltd.Analysis:1. The case involved an application by M/s. Hindustan Platinum Pvt. Ltd. to prevent the Revenue from encashing a bank guarantee of &8377; 70,53,000/-, which was ordered due to a confirmed differential duty of &8377; 29,33,56,787/- against the applicant. The appellant had already deposited &8377; 2,20,01,760/- as per the requirement of pre-deposit under Section 129E of the Customs Act, 1962. The appellant relied on Circular No. 984/8/2014-CX to argue against further payment initiation.2. The interpretation of Circular No. 984/8/2014-CX was crucial in this case. The circular specified conditions for recovery of amounts during the pendency of appeals, emphasizing that coercive measures for recovery beyond the pre-deposit amount should not be taken. The circular did not address the recovery of other dues apart from duty and penalty, as highlighted in the case of Dee Pearls (India) Pvt. Ltd.3. The Revenue argued that since the export goods were confiscated and an option for redemption with a fine of &8377; 5.00 crores was offered, the appellant had no choice but to pay the redemption fine as the goods had already been exported. This situation raised questions about the relevance of the bank guarantee in safeguarding the redemption fine.4. The Tribunal's decision in the case of Dee Pearls (India) Pvt. Ltd. was cited, emphasizing that once penalties and duties are stayed, only the redemption fine covered by the bank guarantee should be recovered. The bank guarantee was considered a safeguard for the redemption fine, especially when goods had already been disposed of. Relying on this precedent, the application to prevent encashment of the bank guarantee was rejected.In conclusion, the judgment delved into the nuances of Circular No. 984/8/2014-CX, the implications of confiscation of goods and redemption fines, and the significance of the bank guarantee in such scenarios, drawing parallels with relevant legal precedents to arrive at a decision regarding the encashment of the bank guarantee.
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