2008 (3) TMI 304 - HC - Customs

Court directs prompt decision on license extension, maintains bank guarantee pending Grievance Committee determination.

The court directed the 1st respondent to promptly decide on the petitioner's license extension request within eight weeks. The petitioner was instructed ... Whether Commissioner can invoke Bank Guarantee, when petitioner’s application for extension of period EPCG Licence is pending before Grievance Committee of DGFT - Since there is nothing to indicate that the said request of the petitioner has been rejected, Commissioner in not justified in invoking the Bank guarantee – DGFT shall take a decision on request made by the petitioner for extension of the period of licence as expeditiously as possible - and in the meanwhile the petitioner shall keep the bank guarantee alive for another period of one year Issues:1. Invocation of bank guarantee pending decision on license extension.Analysis:The petitioner sought a direction to prevent the 2nd respondent from invoking a bank guarantee until a decision on the extension of the license period was made by the Grievance Committee of the 1st respondent. The EPCG license granted to the petitioner was subject to fulfilling export obligations, which had not been met. The petitioner's request for extension was pending before the Grievance Committee, as evidenced by communications. Despite the pending request, there were concerns that the bank guarantee might be invoked.The court acknowledged the pending request for license extension and deemed it inappropriate for the 2nd respondent to invoke the bank guarantee at that stage. The judgment directed the 1st respondent to decide on the petitioner's extension request promptly, within eight weeks of the judgment. The petitioner was instructed to keep the bank guarantee valid for another year and inform the 2nd respondent accordingly. The decision on invoking the bank guarantee would be based on the Grievance Committee's decision regarding the license extension. The petitioner was required to provide a copy of the judgment to the 1st respondent for compliance.In conclusion, the writ petition was disposed of with the outlined directions, emphasizing the importance of awaiting the decision on the license extension before invoking the bank guarantee. The judgment aimed to balance the interests of both parties involved while ensuring a fair and timely resolution to the pending issues surrounding the license extension and bank guarantee invocation.