2017 (1) TMI 1670 - HC - Customs

Court orders bank guarantee replacement for customs duty on diverted imports, emphasizing compliance and duty obligations

M/s. PATEL ENGINEERING LIMITED Versus NATIONAL THERMAL POWER CORPORATION AND ANR.

The court directed respondent No.1 to replace the petitioner's bank guarantee with its own for the payment of customs duty on Hot Rolled Plates imported ... Demand of Customs Duty alongwith interest - import of Hot Rolled Plates under advance authorizations - HELD THAT:- The respondent No.1, under instructions, submits that NTPC is willing to replace the bank guarantee in the sum of ₹ 8,15,00,000/-, furnished by the petitioner to the Custom Authorities, with a bank guarantee of NTPC. The writ petition is disposed of directing the respondent No.1 to approach the Custom Authorities for the replacement of the bank guarantee in the sum of ₹ 8,15,00,000/- furnished by the petitioner. The petitioner shall afford all assistance for the said purpose and both the parties shall execute such necessary documents, as may be required by the Customs Authorities, for replacement of the bank guarantee. Petition disposed off. Issues:Securing payment of customs duty on imported Hot Rolled Plates under advance authorizations.Analysis:The petitioner sought a direction for the payment of customs duty on Hot Rolled Plates imported under advance authorizations for a specific project but later diverted for another project due to the original project not going through. The petitioner had provided a bank guarantee to the Customs Authorities for the duty claim. The petitioner requested the release of the bank guarantee as the plates were diverted for a different project. The respondent No.1 agreed to replace the petitioner's bank guarantee with its own. The court noted the respondent's commitment and directed the respondent No.1 to approach the Customs Authorities for replacing the bank guarantee with its own, with both parties required to assist and execute necessary documents for the replacement.This judgment highlights the importance of fulfilling customs duty obligations on imported goods under advance authorizations, even in cases where the project for which the goods were imported does not materialize. It also emphasizes the significance of bank guarantees in securing duty payments and the willingness of authorities to facilitate necessary arrangements for the fulfillment of such obligations. The court's decision to dispose of the writ petition by directing the replacement of the bank guarantee serves to ensure compliance with customs regulations while also addressing the petitioner's concerns regarding the diverted use of the imported goods.