TaxTMI 
TaxTMI 
2021 (8) TMI 670
X X X X Extracts X X X X
X X X X Extracts X X X X
....visional release of the Vessel under Section 110A of the Customs Act, 1962 on the condition of the petitioner furnishing bank guarantee or cash deposit of Rs. 1.5 Crores as security, and execution of bond equal to three times the value of goods [vessel and High Speed Diesel] and binding itself to pay duty, redemption fine, interest and penalty on completion of adjudication proceedings, be quashed and set aside. The petitioner has prayed for a further relief that the respondents be directed to allow provisional release of the Vessel based on a bond furnished by it of Rs. 7 Crores and a bank guarantee of Rs. 35 lakhs submitted by the petitioner. The petitioner has also prayed for an additional relief that respondents be directed to allow clea....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Vessel, without there being a written correspondence in that regard. The petitioner acted in good faith and complied with such directions of respondent no.1 by furnishing the bank guarantee dated April 28, 2021 for Rs. 35 lakhs issued by the ICICI Bank in favour of respondent no.1. A copy of the bank guarantee is annexed as Exhibit "C" to the petition. Also, the petitioner furnished a bond of Rs. 7 Crores undertaking that the said bank guarantee was submitted to cover any penalty and fine that be adjusted in lieu of confiscation of the Vessel. 4. The petitioner thereafter obtained a survey report issued by the valuers S. V. Gupte, Thane, valuing the Vessel at Rs. 3 Crores which was in variance with the valuation accepted by respondent n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing a letter dated June 28, 2021 to respondent no.1, inter alia, stating that the demand by respondent no.1 for increased/additional bank guarantee was arbitrary, unreasonable and in contravention of the law. According to the petitioner such letter was not replied. In these circumstances the petitioner has approached this Court assailing the action of the respondents. 6. The respondents are represented. By our order dated July 8, 2021, we directed the respondents to file a reply-affidavit to the petition by July 12, 2021. Accordingly, a reply affidavit of Mr. Yogesh S. Chitte, the Deputy Commissioner of Customs, dated July 12, 2021, is placed on record. The opposition of the respondents is, firstly, on the ground that the impugned commun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evant sections of the Customs Act under which an action would be contemplated would be furnished in a detailed show cause notice to be issued to the petitioner as the matter was under active investigation and surveillance. In paragraph 6 of the reply-affidavit, respondent no.1 has stated that when the vessel was under investigation the petitioner had intended to make a voluntary deposit in the form of bank guarantee and had submitted the bank guarantee for Rs. 35 lakhs and bond for Rs. 7 Crores in lieu of the duty liability, fine and penalty, thereby, requesting for provisional release of the Vessel. However, such approach of the petitioner was not acceptable and accordingly impugned letter dated June 25, 2021 was issued calling upon the pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ard the learned counsel for the parties. We have also perused the record and the impugned show cause notice. 9. At the out-set, we may observe that the evasion of duty on the materials, namely, the HSD and the sludge oil does not appear to be of substantial amounts for which the bank guarantee of Rs. 35 lakhs, as furnished by the petitioner, can be said to be insufficient. The question is, however, of the Vessel itself being treated as goods and which is valued at Rs. 7 Crores. As to whether the Vessel would be liable for confiscation and further consequential orders, is an issue which would be required to be decided in the adjudication of the show cause notice, which has now been issued to the petitioner calling upon the petitioner to r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on such documents grant a provisional release of the Vessel within one week from today. (b) The petitioner shall keep the bank guarantee and the bond valid till adjudication of the show cause notice, and for a period of two weeks thereafter. (c) The petitioner shall submit its reply to the show cause notice, if not already submitted, within the prescribed period of 30 days from the date of receipt of the show cause notice. On receipt of such reply, the adjudicating authority is directed to adjudicate show cause notice within a period of six weeks from the date of receipt of the reply and pass appropriate orders on the show cause notice, in accordance with law. (d) In the meantime, until the adjudication of the ....