2016 (7) TMI 421 - HC - Customs

Court sets aside demand notice, remands for fresh adjudication with interim refund order

The Court disposed of the appeal, instructing the petitioner to furnish a bank guarantee after setting aside a demand notice. The matter was remanded to ... Condition of mandatory deposit of certain amount before filing an appeal - The learned Counsel for the respondent submitted that as per the amendment made, even if the appellant has preferred appeal against the demand confirmed the order in the original, the requisite amount to be deposited is only 7.5% and therefore, full amount of the demand confirmed cannot be retained by the Department. Held that:- Considering the facts and circumstances that the demand is set aside in the proceedings before the Appellate Authority earlier and also by the Tribunal and the matter is remanded to the Original Authority and the matter is at large pending before the Original Authority, we find that the interim order passed by this Court in the present appeal can be continued so far as it relates to refund of the amount as furnishing of the Bank guarantee. - Until the appropriate order is passed by the Appellate Authority, as referred to herein above, the application for waiver and further consequential order, the interim stay granted by this Court in the present appeal for refund of the amount on condition of furnishing of Bank guarantee shall continue to remain in operation. - Decided in favor of appellant. Issues:1. Setting aside a demand notice and directing the petitioner to furnish a bank guarantee.2. Appeal against the Order-in-Original.3. Implementation of interim order for return of amounts by furnishing a bank guarantee.4. Refund of the amount exceeding 7.5% of the demand.5. Adjudication by the Original Authority and subsequent appeal rights.6. Continuation of interim order for refund and bank guarantee.7. Appellate Authority's examination of waiver and quantification of retained amount.8. Modification of rights and contentions based on the Appellate Authority's order.Issue 1: Setting aside a demand notice and directing the petitioner to furnish a bank guaranteeThe appeal was against an order setting aside a demand notice and instructing the petitioner to provide a bank guarantee. The Court heard both sides and noted the interim order's non-implementation regarding the return of amounts by furnishing a bank guarantee. The matter had been remanded to the Original Authority for fresh adjudication.Issue 2: Appeal against the Order-in-OriginalThe respondent had appealed against the Order-in-Original, leading to the matter being remanded to the Original Authority for reconsideration. The Court considered the implications of the appeal process and the amount to be deposited during this stage.Issue 3: Implementation of interim order for return of amounts by furnishing a bank guaranteeAfter discussions, both sides agreed that the Original Authority should adjudicate the matter first. The Court allowed the continuation of the interim order until the Appellate Authority's decision on waiver and refund quantification.Issue 4: Refund of the amount exceeding 7.5% of the demandThe Court addressed the potential refund of the amount exceeding 7.5% of the demand, emphasizing the need for proper examination during the appeal process. The Appellate Authority would determine the amount to be retained pending the appeal.Issue 5: Adjudication by the Original Authority and subsequent appeal rightsThe Court directed the Original Authority to make a decision within three months, allowing the respondent to appeal if the demand is confirmed. The respondent could seek waiver for appeal maintainability, with all contentions to remain open before the Appellate Authority.Issue 6: Continuation of interim order for refund and bank guaranteeThe interim stay granted by the Court for refund on the condition of furnishing a bank guarantee would continue until the Appellate Authority's appropriate decision. The rights and contentions of the parties would be modified accordingly.Issue 7: Appellate Authority's examination of waiver and quantification of retained amountThe Appellate Authority would examine the waiver application and quantify the amount to be retained pending the appeal. All contentions of both sides would be considered during this process.Issue 8: Modification of rights and contentions based on the Appellate Authority's orderThe Court disposed of the appeal in accordance with the provided order, with no costs imposed. The rights and contentions of the parties would be subject to modification based on the Appellate Authority's decision, with remedies available in law.