Encashment of bank guarantee for provisional vessel release declined where confiscation and redemption fine had already been ordered.

The Tribunal declined to restrain encashment of a bank guarantee furnished for provisional release of a vessel pending appeal. It noted that the vessel had already been adjudicated as confiscated with an option of redemption fine, and that the applicant continued to use and possess the vessel. On that basis, it found no case for invoking Rule 4 or Rule 41 of the CESTAT (Procedure) Rules to grant the requested relief. The application was dismissed.

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Issues: Whether the Tribunal should restrain the Revenue from encashing the bank guarantee furnished for provisional release of the vessel pending the appeal.

Analysis: The vessel had been provisionally released on bond and bank guarantee, and after adjudication it stood confiscated with an option of redemption fine. The application sought to prevent encashment of the bank guarantee while the appeal remained pending. The Tribunal found that no case was made out for exercising its powers under Rule 4 and Rule 41 of the CESTAT (Procedure) Rules, as the redemption fine was payable in lieu of confiscation and the applicant continued to use and possess the vessel.

Conclusion: The request to restrain encashment of the bank guarantee was rejected and the application was dismissed.

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