By TIOL News Service

AHMEDABAD, FEB 05, 2019: THE petitioner has challenged the notice dated 8.1.2019 issued by the Assistant Commissioneru/r 9 and 10 of the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995, requiring the petitioner to pay a sum of Rs.52,39,752/- with interest as applicable, being the amount of Government dues payable by the petitioner.

By virtue of the said order of attachment, the property of the petitioner is sought to be attached and the petitioner is restrained from transferring the said property in any manner.

The facts are -

+ Against o-in-o dated 11.6.2004, the assessee had preferred an appeal before the CESTAT and by an order dated 25.01.2005 were directed to make a pre-deposit of Rs.5,00,000/- and report compliance. By an order dated 09.06.2005, the appeal was dismissed for non-compliance. The assessee contends that they were not served with a copy of the order directing pre-deposit and hence could not comply and that only when the department by their letter dated 14.08.2018 sought recovery of dues that they learnt about the said order. They, therefore, have moved an application for restoration of appeal on 09.10.2018 and which is pending.

+ In another matter, the Tribunal by order dated 12.11.2014, observed that the Commissioner(A) directed the petitioner to deposit an amount of Rs.13 lakhs as against the confirmed demand of approximately Rs.13.80 lakhs. Considering that the pre-deposit ordered was excessive, the Bench had asked the appellant to make a pre-deposit of Rs.1.50 lakhs. It seems even this order also did not reach the appellant and he failed to comply with the same by the mandated date of 12.01.2015.

+ On 6.10.2018, the petitioner moved an application before the Commissioner (Appeals) after complying with the orders of pre-deposit, requesting for an opportunity to be heard in person.

+ During the pendency of the proceedings before the Tribunal and the Commissioner (Appeals), the impugned order of attachment came to be passed.

+ The Counsel for the Revenue informed the High Court that together with interest, the petitioner is liable to pay approximately Rs.1,50,00,000/- in respect of the matters which are allegedly pending before the appellate authorities.

+ The petitioner submitted that in order to secure the interest of the revenue, they would deposit Rs.40,00,000/- in cash and also submit a bank guarantee of Rs.1,10,00,000/- with a request that the bank guarantee may not be encashed for a period of two months in case adverse orders are passed by the appellate authorities; that the quantification of interest may be provided.

The High Court considered the submissions and observed -

"7. In the backdrop of the above facts and contentions, this court is of the view that since the petitioner is ready and willing to deposit an amount of Rs.40,00,000/- in cash as well as furnish sufficient bank guarantee to secure the interest of the revenue in the above proceedings, the request made by the learned advocate for the petitioner requires to be accepted.

8. In the above view of the matter, the petition succeeds and is accordingly allowed to the following extent. It is hereby ordered that upon the petitioner depositing a sum of Rs.40,00,000/- towards principal and penalty with the respondents and furnishing two bank guarantees for a sum of Rs.55,00,000/- each, towards interest, the respondents shall release the attachment made over the property in question being Plot No.6102/10, 4th Phase GIDC, Vapi.”

(See 2019-TIOL-509-HC-AHM-CX)