Court orders release of goods upon bank guarantee submission, resolves demurrage dispute. Appeal and contempt case set for February 2017.

The Court directed the Warehousing Authority to release the goods to the petitioner upon submission of a bank guarantee worth Rs. 10 lakhs within three weeks. Once the guarantee is furnished, the respondent must release the goods within 24 hours, resolving the dispute over demurrages. The Court decided to list the appeal for hearing alongside the contempt case in February 2017, signaling a procedural approach to address the matter effectively.

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Issues:
Contempt petition arising from Civil Appeal No. 5720 of 2008 regarding confiscated goods; Liability for demurrages on imported goods stored in warehouse; Release of goods by the Warehousing Authority; Bank guarantee requirement for releasing goods.

Analysis:
The contempt petition stemmed from Civil Appeal No. 5720 of 2008, where goods imported by the petitioner were initially deemed liable for confiscation by Customs authorities. However, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled in favor of the petitioner, raising questions about the correctness and legality of the initial confiscation order.

During the proceedings before the customs authorities and the Tribunal, the imported goods were stored in a warehouse maintained by the Central Warehousing Authority. Despite the petitioner's success before the Tribunal, the Warehousing Authority demanded payment of demurrages amounting to approximately Rs. 95 lakhs, significantly higher than the original value of the goods at Rs. 12 lakhs.

The crucial issue arose regarding the liability for paying demurrages on goods deposited with the Warehousing Authority. The Court deliberated on who should bear this cost when goods are deposited following a customs authority order and not voluntarily by the importer, highlighting a key legal and financial concern in the case.

Considering the prolonged pendency of the appeal for about 8 years, the Court decided to direct the Warehousing Authority to release the goods to the petitioner upon the petitioner furnishing a bank guarantee worth Rs. 10 lakhs within three weeks. Once the bank guarantee is submitted, the respondent must release the goods within 24 hours, ensuring a fair resolution for both parties involved.

In light of the order for releasing the goods and the pending appeal, the Court found no immediate reason to continue with the contempt case. It was deemed appropriate to list the appeal for hearing alongside the contempt case in the second week of February 2017, indicating a procedural step to address the matter comprehensively and efficiently.

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