2023 (7) TMI 1133 - AT - Customs

Tribunal reduces bank guarantee for Dry Dates import release, emphasizing show cause notice not sufficient.

M/s. K.L. International Versus Commissioner of Customs (Prev.), Jamnagar

The Tribunal reduced the bank guarantee amount for the provisional release of imported Dry Dates from Rs. One Crore to Rs. 18 Lakhs, aligning it with a ... Request to reconsider the amount of bank guarantee/ cash deposit ordered to be furnished - provisional release of imported Dry Dates - HELD THAT:- The appellant imported the same goods valued at Rs. 4.08 Crores at Pipavav Port and in the same nature of dispute the goods were seized however in this Tribunal in KL INTERNATIONAL VERSUS C.C. -JAMNAGAR (PREV) , JAMNAGAR, GUJARAT [2022 (11) TMI 650 - CESTAT AHMEDABAD], the appellant was allowed to furnish bank guarantee of Rs. One Crore for provisional release of the goods. Since in the present case, the same dispute is involved and the only difference is Port of import otherwise in the same facts and circumstances it has been decided in above said order that bank guarantee amount was reduced from Rs. 12 Crores to Rs. One Crore. Therefore, there is no reason to defy the order of this Tribunal for fixing the amount of bank guarantee/ cash deposit to be furnished for provisional release of the goods. Merely by issuing a show cause notice which is nothing but only proposals, the circumstances of the earlier case decided in the order dated 11.11.2022 and in the present case are not different, therefore on this count, the amount of bank guarantee cannot be enhanced. There are no reason that despite this Tribunal passed an order in the appellant’s own case which was accepted by the Revenue why different yard sticks can be applied in the present case, particularly when all the facts and circumstances of the case involved in the Tribunal’s order in KL International and in the present case are absolutely identical - the amount of bank guarantee must be reduced - the goods shall be provisionally released on execution of bond for total value of goods and on furnishing a bank guarantee/ cash security of Rs. 18 Lakh - appeal disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the amount of bank guarantee/cash deposit fixed by the Chief Commissioner for provisional release of imported perishable edible goods can be reduced in light of a prior Tribunal order in the appellant's own case involving identical goods and valuation. 2. Whether the issuance of a show cause notice in the present proceedings distinguishes the present case from the earlier Tribunal-decided case such as to justify a higher bank guarantee. 3. Whether the Tribunal should apply the ratio of its earlier order (reducing bank guarantee from a higher amount to a specified lower amount) proportionately to goods of lesser value imported in the same factual matrix but through a different port. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Applicability of prior Tribunal order in the appellant's own case to reduce bank guarantee Legal framework: The Tribunal's power to direct provisional release of seized imported goods on execution of bond and furnishing of bank guarantee/cash security; principle of judicial consistency and respect for earlier orders in identical factual matrices. Precedent Treatment: The impugned order relied upon various judgments (not specified in the record) to justify the higher security; the Tribunal's earlier order in the same dispute (final order dated 11.11.2022) fixed a bank guarantee at a lower amount for the same goods/value and was accepted by Revenue. Interpretation and reasoning: The Tribunal emphasises identity of facts-same goods, same importer, same nature of dispute, identical value in the earlier instance (Rs. 4.08 Crores) where the security was reduced to Rs. 1 Crore. The only factual difference now is the port of import; the Tribunal finds that a change of port does not constitute a material distinction warranting a different quantum of security. Applying the doctrine of consistent application of its own order, the Tribunal reasons that the earlier reduction should govern the present case and that proportionality permits scaling the security down consistent with the lesser value of goods here (Rs. 72,22,361/- ? bank guarantee fixed at Rs. 18 Lakhs). Ratio vs. Obiter: Ratio - where a prior final Tribunal order in the appellant's own case on identical factual matrix reduced security, the same rationale applies to subsequent identical import instances; port difference is immaterial. Obiter - reliance on unspecified external judgments by the Chief Commissioner is noted but not followed as controlling authority. Conclusion: The Tribunal holds that the bank guarantee fixed by the Chief Commissioner (Rs. One Crore) must be reduced; provisional release ordered on execution of bond and furnishing of bank guarantee/cash security of Rs. 18 Lakhs. Issue 2 - Effect of issuance of a show cause notice on quantum of security Legal framework: Conceptual distinction between issuance of a show cause notice (allegation/proposal) and substantive determination; security for provisional release is an exercise in balancing risk and precedent rather than punishment. Precedent Treatment: The Chief Commissioner treated the presence of a show cause notice in the present proceedings as a distinguishing factor from the earlier case where no such notice was issued. Interpretation and reasoning: The Tribunal reasons that a show cause notice, being a procedural proposal, does not alter the underlying facts or the risk assessment sufficiently to justify departure from the prior Tribunal order. The circumstances of the earlier and present cases are found to be 'absolutely identical' apart from the show cause notice and port, hence the issuance of notice does not constitute a material difference to enhance security. Ratio vs. Obiter: Ratio - issuance of a show cause notice alone is not a material distinction to vary the quantum of provisional security where other facts and prior Tribunal direction are identical. Obiter - general observations on the nature of show cause notices as non-determinative for security assessment. Conclusion: The Tribunal rejects the Chief Commissioner's contention that the show cause notice justifies a higher bank guarantee and holds that it cannot be a basis to enhance security in the present case. Issue 3 - Proportional application of prior Tribunal ratio to goods of lesser value Legal framework: Principle of proportionality in fixing security for provisional release; application of precedent ratios to analogous but quantitatively different factual scenarios. Precedent Treatment: The earlier Tribunal order fixed Rs. 1 Crore bank guarantee against goods valued at Rs. 4.08 Crores (post-reduction from Rs. 12 Crores). The present goods are of the same description but lower value (Rs. 72,22,361/-). Interpretation and reasoning: The Tribunal applies the ratio implicit in its earlier order proportionately to the reduced value of goods, arriving at a bank guarantee of Rs. 18 Lakhs. The reasoning adopts a pragmatic proportionality approach: if Rs. 1 Crore sufficed as security against goods worth Rs. 4.08 Crores, a commensurately lower security is appropriate for goods of lesser value in the same factual matrix. Ratio vs. Obiter: Ratio - prior Tribunal quantification serves as a benchmark; proportional scaling of security is appropriate when facts are identical except for value. Obiter - no detailed mathematical formula prescribed; the specific figure (Rs. 18 Lakhs) is derived by proportional application of earlier fixation to present value. Conclusion: The Tribunal directs provisional release on a proportionately reduced bank guarantee/cash security of Rs. 18 Lakhs for goods valued at Rs. 72,22,361/-, modifying the impugned order accordingly. Cross-references and Final Determination 1. Issues 1-3 are interrelated: the Tribunal's determination that the earlier order is binding in effect disposes of the contentions based on show cause notice and other distinctions (see Issue 2), and supports proportional application of the earlier ratio (see Issue 3). 2. The Tribunal modifies the impugned order to the extent of reducing the required bank guarantee/cash deposit to Rs. 18 Lakhs and orders provisional release on bond and furnishing of that security.