High Court orders petitioner to meet revised bank guarantee requirements for sale of imported aircraft.

The High Court directed the reconsideration of a petitioner's request to sell an aircraft imported under a concessional rate of duty. The Court required the petitioner to provide additional bank guarantees based on the excess sale value of the aircraft over Rs. 10 crores, with the remaining amount up to Rs. 20 crores to be secured through bank or corporate guarantees as directed by the Commissioner. The petitioner was instructed to comply with the modified conditions, including maintaining existing guarantees until the conclusion of show cause proceedings. The Court disposed of the petition with these directions, allowing direct service.

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Issues:
Challenge to communication refusing permission to sell aircraft under concessional rate of duty.

Analysis:
The petitioner imported an aircraft under a concessional rate of duty, but customs authorities alleged inaccurate valuation and breach of conditions. A show cause notice was issued in 2010, pending which the aircraft was released under a bond. The petitioner sought permission to sell the aircraft due to delays in the show cause notice proceedings causing financial losses. The High Court directed reconsideration of the sale request, leading to permission being granted with conditions involving bank guarantees.

The petitioner argued that delays in the show cause notice proceedings were due to the department's inaction, causing financial losses. They requested modification of stringent conditions, suggesting a reduction in the bank guarantee amount and the use of corporate guarantees to avoid high bank charges. The department maintained that the acceptance of bank or corporate guarantees should be at the Commissioner's discretion, highlighting the duty liability, interest, and penalties mentioned in the show cause notice.

After hearing both parties and reviewing the case documents, the Court noted the duty liability of Rs. 8.78 crores, with potential additional interest and penalties. Considering a sum of Rs. 20 crores to safeguard revenue interests, the Court required full security for this amount to grant permission for the aircraft sale. The petitioner had already provided a bank guarantee of Rs. 10 crores in addition to a bond of Rs. 30 crores, which needed to be maintained until the show cause proceedings concluded.

The Court modified the conditions by requiring the petitioner to provide additional bank guarantees based on the excess sale value of the aircraft over Rs. 10 crores. Any remaining amount up to Rs. 20 crores would be secured through bank or corporate guarantees as directed by the Commissioner. The petitioner was instructed to provide guarantees accordingly, ensuring compliance with the modified conditions. The Court disposed of the petition with these directions, allowing direct service.

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