Mansa Cigarettes Pvt. Ltd. vs Union of India (UOI)

K.A. Puj, J.—The Applicants/Original Petitioners have filed this application seeking clarification of the order passed by this Court on 13-1-2010 and also for the direction to the Respondent Authorities that the goods are to be provisionally assessed upon furnishing by the concerned Applicants a bond for appropriate amount and a security for 25% of the bond amount and to clear the goods accordingly.

This Court has issued Rule on 1-2-2010. An Affidavit-in-Reply is filed on behalf of the Respondent.

Heard Mr. Paresh M. Dave, the learned Advocate appearing for the Applicants and Mr. Y.N. Ravani, the learned Standing Counsel appearing for the Excise Department. The order passed by this Court on 13-1-2010 is very clear whereby the Court has directed to provisionally release the goods as well as to make the provisional assessment, and accordingly, the Respondent Authorities have passed certain orders. The only grievance is with regard to the order passed by the Assistant Commissioner of Central Excise, Vadodara-I on 25-1-2010 whereby he has directed the Applicants to provide AB2 bond for Rs. 74,28,500/-and bank guarantee of Rs. 74,28,500/- in view of instruction of the Board contained in paragraph 2.2(b) and paragarph 4.1(ii) of Chapter-14 of the CBEC''s Central Excise Manual. Demanding bank guarantee for Rs. 74,28,500/- is contrary to the directions issued by this Court. The Court has made it very clear that the Applicants should give a bond along with security/bank guarantee as prescribed in paragraph IV (Provisional Assessment Chapter-3, CBEC Excise Manual of the Supplementary) instructions read with Rule 7 of Central Excise Rules, 2002 and CBEC Circular No. 686/2/2003-CX dated 2-1-2003. Both these documents require the Applicants to furnish bank guarantee to the extent of 25% of the bond value only. Despite this, the Assistant Commissioner is demanding the bank guarantee of Rs. 74,28,500/- which is 100% of the bond value.

Mr. Y.N. Ravani, the learned Standing Counsel for the opponents has submitted that looking to the vast difference between the rate of duty applied by the Applicants and rate of duty alleged by the Department, the Applicants be directed to pay 100% bank guarantee of the bond value, otherwise the revenue would suffer and it is not possible to recover the duty amount as the Applicant No. 1 does not have any assets of its own.

We are not impressed by the submissions made by Mr. Y.N. Ravani. The order dated 13-1-2010 was passed more or less on consensus basis. It was made very clear to provisionally release the goods as well as to make provisional assessment and to pass final assessment within six months. There is no ambiguity in the order. If the Revenue is aggrieved by the said order, the remedy lies somewhere else. However, the Revenue passed the order contrary to the directions issued by this Court. Hence, the Assistant Commissioner is hereby directed to make the provisional assessment on the basis of the order dated 13-1-2010 passed by this Court and that too, asking the Applicants to furnish for AB2 bond to the extent of Rs. 74,28.500/- and the bank guarantee of 25% thereof.

Only with a view to protect the interest of the Revenue, we accept the submission made by Mr. Paresh M. Dave that the Petitioner No. 3, i.e. M/s. Golden Tobacco Ltd. being the sole buyer of the goods in question would also provide bond for the differential duty and in case any demand arises, it is open for the Excise Department to execute the said bond against Golden Tobacco Ltd.

Since, Mr. Y.N. Ravani, the learned Advocate appearing for the opponents has raised the grievance that the Applicants are not releasing the goods which are lying at the branches and because of that the Excise Department is not in a position to deal with the goods by disposing of the goods by way of auction, Mr. Paresh M. Dave, the learned Advocate appearing for the Applicants, on instructions, submits that the goods which are lying at the branch office, would be cleared as early as possible and in any case not later than three weeks from today.

With these observations and directions, this Application stands disposed of. Rule is made absolute to the aforesaid extent.

Direct service to Respondent Nos. 2 and 3 is permitted.