Delhi High Court
M/S. Candex Filament Private ... vs Principal Commissioner Of ... on 22 August, 2022
$~14
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 22.08.2022
+ W.P.(C) 11940/2021
M/S. CANDEX FILAMENT PRIVATE LIMITED ..... Petitioner
Through: Ms Anjali J Manish with Ms Laimon
Rani Boro, Advs.
versus
PRINCIPAL COMMISSIONER OF CUSTOMS
(PREVENTIVE) & ANR. ..... Respondents
Through: Mr Harpreet Singh, Sr Standing
Counsel with Ms Suhani Mathur, Mr
Jatin Gaur and Mr Akshay Saxena,
Advs.
CORAM:
HON'BLE MR JUSTICE RAJIV SHAKDHER
HON'BLE MS JUSTICE TARA VITASTA GANJU
[Physical Court hearing/ Hybrid hearing (as per request)]
RAJIV SHAKDHER, J (ORAL):
1. The substantive prayers made in the petition read as follows:
"(a) Issue a writ, order or direction in the nature of certiorari
to quash and set-aside the order dated 16.07.2021 passed by the
Respondent No.2; and/or
(b) Issue a writ, order or direction in the nature of declaration,
holding and declaring that the encashing of the bank guarantee
furnished by the Petitioner as security at the time of provisional
release in reference to the fact that the appeal has been filed
before the Appellate Tribunal after depositing the mandatory
pre-deposit amount;
(c) Issue a writ, order or direction in the nature of mandamus to
the Respondents to release/refund the amount of Rs.24,59,401/-
to the Petitioner, which they have collected by encashing the
bank guarantee;
(d) Grant cost of the petition; and..."
Signature Not Verified
Digitally Signed By:ATUL
JAIN
Signing Date:25.08.2022
20:11:57
2. The effect of the impugned order dated 16.07.2021 is that the refund
sought by the petitioner, with regard to the monies obtained by the
respondents/revenue, against the encashment of three bank guarantees
furnished by the petitioner, has been declined.
3. The record shows that the petitioner had furnished the following three
bank guarantees; the details concerning the same are set forth hereafter:
S.No. BG Number Date of BG Amount of Shipping Bill
BG No. & Date
1 6041IFIBG180002 21.03.2018 Rs.7,29,858/- 2678044 dt.
06.02.2018
2 6041IFIBG180003 21.03.2018 Rs.8,36,533/- 2677670 dt.
06.02.2018
3 6041IFIBG180004 21.03.2018 Rs.8,93,010/- 2677803 dt.
06.02.2018
4. Ms Anjali J. Manish, who appears on behalf of the petitioner, informs
us that since a detention certificate was issued, the provisional release of
goods was not sought, although the aforementioned bank guarantees were
furnished.
5. The record discloses (something which is not disputed by the
respondents/revenue), that a show-cause notice dated 11.05.2018 was issued
to the petitioner and subsequently, an adjudication order was passed on
05.12.2018.
6. The record also reveals that the petitioner preferred an appeal with the
Customs, Excise and Service Tax Appellate Tribunal [in short "the
Tribunal"] against the aforementioned adjudication order, which was
Signature Not Verified
Digitally Signed By:ATUL
JAIN
Signing Date:25.08.2022
20:11:57
accompanied by a pre-deposit amounting to Rs.1,87,500/-, i.e., a sum equal
to 7.5% of the total penalty imposed on the petitioner. The petitioner is
mulct with penalty amounting to Rs. 25,00,000/-.
6.1. We are told that the appeal filed with the Tribunal is pending
adjudication.
7. Mr Harpreet Singh, who appears on behalf of the
respondents/revenue, says that since the validity of the aforementioned bank
guarantees was not extended, they were encashed.
7.1. Admittedly, the aforementioned bank guarantees were invoked on
04.12.2020. The amount against the said bank guarantees was received by
the respondents/revenue via a demand draft dated 29.12.2020.
8. Ms Manish has brought to our notice, a circular bearing Circular
No.984/08/2014-CX, dated 16.09.2014, which, inter alia, states that once a
pre-deposit of the requisite amount is made, then, insofar as the balance
amount claimed by the respondents/revenue is concerned, a stay qua its
recovery would operate, during the pendency of the appeal.
8.1. In this context, our attention is drawn to paragraph 4.2 of the
aforementioned circular, which reads as follows:
"4.2 No coercive measures for the recovery of balance amount
i.e., the amount in excess of 7.5% or 10% deposited in terms of
Section 35F of Central Excise Act, 1944 or Section 129E of
Customs Act, 1962, shall be taken during the pendency of
appeal where the party/assessee shows to the jurisdictional
authorities :
(i) proof of payment of stipulated amount as pre-deposit of
7.5%/10%, subject to a limit of Rs.10 crores, as the case may
be; and
(ii) the copy of appeal memo filed with the appellate authority."
8.2. This position is not disputed by Mr Harpreet Singh.
Signature Not Verified
Digitally Signed By:ATUL
JAIN
Signing Date:25.08.2022
20:11:57
9. Given the fact that there is a stay on the demand raised by the
respondents/revenue, as also the undisputed fact which has emerged, that the
provisional release of goods was not, ultimately, taken recourse to by the
petitioner, to our minds, the aforementioned bank guarantees could not have
been encashed.
10. Mr Singh says that while there is a justification, as to why encashment
of the aforementioned bank guarantees took place, he cannot but accept the
position that the recovery of dues cannot be made, while the appeal of the
petitioner is pending consideration before the Tribunal.
11. Thus, having regard to the aforesaid state of affairs, it is clear that the
respondents/revenue will have to remit the amount to the petitioner, as
reflected in the aforementioned bank guarantees.
12. The respondents/revenue, concededly, can recover the demand raised,
only if the petitioner were to ultimately fail in the appeal or in any other
proceedings taken out thereafter, before a superior forum.
13. Accordingly, the instant writ petition is disposed of, with the direction
that the impugned order dated 16.07.2021 shall stand quashed.
14. The respondents/revenue will remit the amount, which was the subject
matter of the aforementioned bank guarantees, as detailed out, in paragraph
3 above, within three weeks, from the date of receipt of a copy of the
judgment.
RAJIV SHAKDHER, J
TARA VITASTA GANJU, J
AUGUST 22, 2022/pmc
Click here to check corrigendum, if any
Signature Not Verified
Digitally Signed By:ATUL
JAIN
Signing Date:25.08.2022
20:11:57
