Securing Release of Consignment by Furnishing Bank Guarantee: Delhi HC directs to dispose Pre-Deposit Refund Application [Read Order]

The Delhi High Court directed to dispose pre deposit refund application as the release of consignment was secured by furnishing bank guarantee.

The Petitioner impugned the order, whereby the request of the petitioner seeking refund of the pre-deposit of Rs.22,35,800 has been rejected as being premature. As per the petitioner, said amount was deposited by the petitioner for the purposes of availing of the remedy of an appeal against an order-in-original. The counsel submitted that the petitioner intended to appeal against the said order and since there was already a Bank Guarantee with the department of the said amount, he had requested the Custom Excise and Service Tax Appellate Tribunal to appropriate the amount of the Bank Guarantee towards the pre-deposit.

The counsel submitted that by order, the Tribunal accepted the request of the petitioner and permitted the department to encash the Bank Guarantee and appropriate the amount towards the pre-deposit amount and that by final order, the order-in-original was set aside and matter remitted for re-adjudication.

The counsel for the respondent submitted that the Bank Guarantee was furnished for securing provisional release of the consignment and not as a pre-deposit, however, keeping in view the fact that Bank Guarantee was already with the department, Tribunal permitted encashment of the same for appropriation towards the pre-deposit amount.

A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “Petitioner had secured release of the consignment by furnishing a Bank Guarantee much prior to the order-in-original being passed. After the order-in-original was passed, petitioner approached the Tribunal by way of an appeal. The Tribunal noticing that a Bank Guarantee was already furnished, permitted encashment of the same for adjustment towards the pre-deposit amount. Once the order-inoriginal is set aside, petitioner has to be relegated to the position that was obtaining immediately prior to the passing of the order-in-original.”

“The position existing immediately preceding the passing of the order-in-original, was that petitioner had furnished a Bank Guarantee in the sum of Rs.22,35,800/- for provisional release of consignment. In case petitioner seeks refund of the said amount, petitioner would be required to furnish a Bank Guarantee of the same amount to the department so that the department is also placed in the same position as obtaining on the day immediately preceding the passing of the order-in-original” the Court noted

To Read the full text of the Order CLICK HERE

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