ORDER
K.K. Usha, President
1. When the above application for stay came up for hearing, it was agreed that the appeal itself can be disposed of. The appeal is directed against the Order-in-Appeal No. CC(A)/327/ICD/2002 passed by the Commissioner (Appeals). The appeal and stay application filed by the assessee were dismissed on the ground that the appeal was not maintainable.
2. By Order-in-Original dated 31-5-2002/4-6-2002, the Commissioner of Customs, ICD, TKD, adjudicated show cause notices dated 19-12-2000 and 16-8-2001 issued to the appellant herein. These show cause notices related to the valuation of the Concentrate of Alcoholic Beverages (CAB) imported by the appellants from Scotland during the period from 1995 to May 2001. Under the above order it was held that the declared value of the imported CAB should be determined in terms of Rule 6 of the Customs Valuation Rules, 1988. The Commissioner finalised the provisional assessment and confirmed the differential duty demand of Rs. 41,70,49,724/-. Against the above order, the assessee has filed appeal C/401/2002-A along with stay application before this Tribunal. Based on the order passed by the Learned Commissioner, as mentioned above, the Deputy Commissioner of Customs, ICD, TKD, finalized the provisional assessment for the subsequent period, viz., June 2001 to May 2002 covering 46 Bills of Entry. He confirmed the differential duty demand of Rs. 8,81,85,011/- under proceedings dated 19-6-2002.
3. Since the Department sought to encash the bank guarantee executed by the appellant for an amount of Rs. 12.77 Crores as a consequence of the finalisation of the assessment as above, the appellants herein filed a writ petition before the Hon’ble High Court of Delhi. By order dated 19-6-2002 the Hon’ble High Court directed the Department to maintain status quo with regard to the encashment of the bank guarantee till the disposal of the writ petition. Thereafter the writ petition was disposed of by order dated 23-7-2002 with a direction that the interim order dated 19-6-2002 passed by the High Court shall continue to be in force till the Commissioner of Customs (Appeals) takes a final decision in the application for stay filed before him.
4. The Commissioner (Appeals) dismissed the appeal as well as the stay application holding that what has been impugned in the appeal is not an order passed by the Deputy Commissioner but only a correspondence. Learned Commissioner took the view that the appeal and the stay application are not maintainable against the Deputy Commissioner’s correspondence dated 19-6-2002.
5. It is contended on behalf of the appellant before us that what has been impugned before the Commissioner (Appeals) was not a mere correspondence from the Deputy Commissioner but a proceeding finalizing the assessment for the period from June 2001 to May 2002 covering 46 Bills of Entry. Learned Departmental Representative Shri P.K. Jain who appeared in this case agreed with the above submission made by the learned Counsel for the appellant. It is relevant to note that pursuant to the above mentioned proceedings the Revenue encashed the bank guarantee on 2-9-2002. If the proceedings impugned before the Commissioner (Appeals) was only a correspondence and not a proceeding finalising the assessment the Revenue could not have proceeded to realize the amount due under the above proceedings by way of encashing the bank guarantee. We have no doubt that what was impugned before the Commissioner (Appeals) is the final assessment proceedings and not a mere correspondence. Therefore, the Commissioner (Appeals) has committed a grave error in dismissing the appeal and the application for stay on the ground that the appeal is not maintainable. We are, therefore, inclined to set aside the order impugned before us and we do so.
6. It is contended on behalf of the appellant that since there is a stay of encashing bank guarantee granted by the High Court till the disposal of the stay application by the Commissioner (Appeals) and since the Commissioner (Appeals) has wrongly dismissed the stay application along with the appeal on the ground that appeal is not maintainable, the appellant is entitled to be put back to his original position at the time of Commissioner passing the impugned order, which is being set aside by this Tribunal. Reliance was placed by the learned Counsel on a decision of the Bombay High Court in Mahindra & Mahindra Ltd, v. UOl – 1992 (59) E.L.T. 505 in support of his above contention. On the other hand, the learned DR would submit that no such relief can be granted by this Tribunal since the stay application before this Tribunal has become infractuous on the revenue encashing the bank guarantee on 2-9-2002. He submits that there is no justification for directing the Revenue to pay back the amount to the assessee even if the order passed by the Commissioner (Appeals) is unsustainable in law.
7. We are not inclined to accept the objection raised on behalf of the Revenue. In the above mentioned decision of the Bombay High Court, it was held that the Department could not have encashed the bank guarantee before the expiry of statutory period of three months for filing the appeal. After holding that such an action is highly improper the Court directed to pay back the entire amount recovered by encashing bank guarantee to the assessee with a further direction to the assessee to execute a bank guarantee in favour of the Collector of Central Excise for the amount impugned. It was held that the bank guarantee will continue untill the disposal of the stay application by the Tribunal. In the present case the Hon’ble High Court of Delhi directed that the bank guarantee shall not be encashed till orders are passed by the Commissioner (Appeals) on the stay application. As mentioned earlier the stay application was dismissed by the Commissioner (Appeals) along with the appeal on the ground that the appeal is not maintainable. Since we are holding that the above action of the Commissioner (Appeals) is illegal and untenable in law, we direct the Revenue to refund the amount received by way of encashment of the bank guarantee to the assessee within a period of two weeks. There would be a further direction to the assessee that it shall furnish a bank guarantee for the same amount in favour of the Revenue within a period of one week from the date of receipt of the amount. Thereafter both the parties will be bound by the direction given by the Hon’ble High Court in its order dated 23-7-2002, namely, that the interim order of stay given by the High Court will be in force till the Commissioner (Appeals) takes final decision in the application for stay.
8. The application for stay and the appeal are disposed of as above.
