Adjustment of pre-deposit against bank guarantee for provisional release of seized goods upheld for unpaid differential duty.

Money deposited during investigation in connection with seizure was required to be adjusted against the bank guarantee sought for provisional release of goods, because the guarantee was directed only for the unpaid differential duty. As no confirmed demand had treated the deposit as an independent past liability, the deposited amount could not be ignored when computing the security. The Tribunal therefore directed acceptance of a bank guarantee for the remaining differential duty after set-off of the deposit and ordered provisional release of the goods.

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Issues: Whether the amount already deposited during investigation could be adjusted against the bank guarantee required for provisional release of the seized goods.

Analysis: The Tribunal followed its earlier order on the same issue and held that the direction to furnish bank guarantee for 100% of the differential duty necessarily meant the guarantee was required only for the unpaid amount. Since the deposit had been made in connection with the seizure and there was no confirmed demand treating it as past liability, the deposit could not be ignored for the purpose of computing the bank guarantee.

Conclusion: The respondent Commissioner was directed to accept a bank guarantee for 100% of the unpaid differential duty after adjusting the amount already deposited, and to provisionally release the goods within the stipulated time. The application was allowed in favour of the applicant.

Ratio Decidendi: Where money has already been deposited in connection with seizure and no confirmed demand exists treating it as an independent liability, such deposit must be adjusted against the bank guarantee required for provisional release, so that security is taken only for the unpaid balance.

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