Court orders Customs Authority to grant DEPB Scheme benefits, release bank guarantee, deeming its requirement arbitrary.

The Court directed the Customs Authority to treat the export of the shipping bill dated 15-6-2011 as eligible for the DEPB Scheme benefits and to release the bank guarantee of Rs. 2 crores for the earlier shipments. The writ petition was allowed, with the Court deeming the continued requirement of the bank guarantee to be arbitrary and unreasonable.

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Issues Involved:
1. Provisional release and export of goods.
2. Requirement of furnishing bank guarantee.
3. Eligibility for DEPB Scheme benefits.
4. Compliance with CBEC Circulars.

Issue-wise Detailed Analysis:

1. Provisional Release and Export of Goods:
The petitioner, an export house, sought directions against the Customs Authority to permit the provisional release and export of its goods pursuant to the CESTAT order dated 8-12-2011. The petitioner had filed shipping bills for exporting fabrics worth Rs. 9.25 crores, which were detained by the Revenue for investigation. Despite furnishing a bond with a bank guarantee of Rs. 2 crores, the goods were not released, prompting the petitioner to approach the Court. The Court directed the authorities to decide on the petitioner's representation, but the Commissioner rejected the request for release of the bank guarantee and waiver of the condition for a new bank guarantee for subsequent shipments.

2. Requirement of Furnishing Bank Guarantee:
The CESTAT, in its order dated 8-12-2011, found the requirement of furnishing a bank guarantee to the extent of 25% of the bond amount for the subsequent shipping bills to be unjustified. The Tribunal noted that the petitioner had already provided a bank guarantee of Rs. 2 crores for earlier consignments and that the provisional release of the goods would not adversely affect the Revenue's case. The Tribunal directed that the existing bank guarantee should suffice for the present consignment, and no further bank guarantee was required.

3. Eligibility for DEPB Scheme Benefits:
The Customs Authority, citing a Circular dated 22-9-2011, refused to permit the export under the DEPB Scheme, stating that the Let Export Order (LEO) was not given by the cut-off date of 30-9-2011. The petitioner argued that the goods could not be exported due to the oppressive condition of furnishing a bank guarantee, which was later set aside by the CESTAT. The Court found the Customs Authority's position to be indefensible and arbitrary, as the petitioner was unjustly denied the DEPB Scheme benefits due to an unlawful condition.

4. Compliance with CBEC Circulars:
The Court referred to the CBEC Circular dated 4-1-2011, which emphasized that goods detained for tests should be dealt with expeditiously, and continued detention beyond three days should be brought to the Commissioner's notice. The goods in question were neither detained for tests nor subject to any assessment order. The Customs Authority's insistence on maintaining the bank guarantee was deemed unwarranted, as the necessary samples for investigation had already been drawn, and the export proceeds were realized.

Conclusion:
The Court directed the Customs Authority to treat the export of the shipping bill dated 15-6-2011 as eligible for the DEPB Scheme benefits and to release the bank guarantee of Rs. 2 crores for the earlier shipments. The writ petition was allowed, with the Court deeming the continued requirement of the bank guarantee to be arbitrary and unreasonable.

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