2014 (2) TMI 701 - HC - Customs

Court orders release of goods upon bank guarantee & cash payment

SUMANGALA STEELS PVT. LTD. Versus COMMISSIONER OF CUSTOMS, CHENNAI

The court directed the respondent to release the goods upon the petitioner furnishing a bank guarantee of Rs. 22.50 lakhs and making a cash payment of Rs. ... Confiscation of goods - release of goods - Tribunal had stayed the order of the Commissioner on condition that the petitioner has to pay a sum of Rs. 3 lakhs - Sum already paid by assessee - However, the petition filed to release the goods has been dismissed by the second-respondent Tribunal; since the goods have been lying for a period of three years - Held that:- only remedy now sought by the petitioner is that goods have to be released on his furnishing bank guarantee as directed by the Tribunal to the tune of Rs. 45 lakhs. According to the learned counsel for the petitioner, instead of making payment of Rs. 45 lakhs in the form of cash, the petitioner is willing to pay the said amount by way of bank guarantee. Respondent is directed to release the goods, however, on the petitioner furnishing bank guarantee to the tune of Rs. 22.50 lakhs and making cash payment to the tune of Rs. 22.50 lakhs (totally Rs. 45 lakhs) and also on the petitioner filing an affidavit of undertaking to the effect that the said bank guarantee will be kept alive for a period of one year or till the disposal of the appeals - Decided in favour of assessee. Issues:Prayer for release of goods pending disposal of Customs Appeals.Analysis:The petitioner filed a writ petition seeking the release of goods contained in Shipping Bill Nos. 3059706, 3063066, 3063537, 3064974, and 3066777, pending the disposal of Customs Appeals bearing Nos. 437 and 438 of 2010. The petitioner argued that despite directions given in previous writ petitions to expedite the appeal process, the appeals had not been disposed of by the Tribunal. The petitioner highlighted the decreasing value of the steel alloy goods in question and the financial strain on the petitioner company. The petitioner requested the goods' release upon furnishing a bank guarantee instead of paying a fine of Rs. 45 lakhs as directed by the Tribunal and Commissioner.The respondent-department contended that the appeals were ripe for hearing and listed for disposal, emphasizing the possibility of auctioning the goods in case of the petitioner's failure in the pending appeals. The respondent opposed releasing the goods, stating that fines must be paid in cash and not through a bank guarantee. The petitioner, on the other hand, was willing to provide a bank guarantee for the fine amount, arguing that it would secure the value if the appeals were unsuccessful.The court considered both parties' submissions and noted that the goods could be released as per the Commissioner's order, subject to the condition of paying a fine of Rs. 45 lakhs. The court acknowledged the previous time-limit set for appeal disposal, the extended period the goods had been held, and the nature of the goods being steel alloys. Consequently, the court held that the petitioner was entitled to relief and directed the first respondent to release the goods upon the petitioner furnishing a bank guarantee of Rs. 22.50 lakhs and making a cash payment of Rs. 22.50 lakhs, totaling Rs. 45 lakhs. The petitioner was also required to file an affidavit to keep the bank guarantee active for a year or until the appeal's finalization. Failure to comply would result in penal action against the petitioner. The Tribunal was instructed to dispose of Appeal Nos. 437 and 438 of 2010 promptly as previously directed in related writ petitions.In conclusion, the writ petition was disposed of with the above directions, with no costs imposed, and the connected Miscellaneous Petition was closed.