Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of Ramesh Nair (Judicial Member) and Raju (Technical Member) allowed an appeal which was filed against Order passed by the Commissioner of Customs whereby; the appellant’s imported seized goods had been provisionally released subject to the execution of bond for full value with Bank Guarantee of Rs1, 38, 12,513. The appellant had challenged the said order on the ground that the condition of bank guarantee is exorbitant therefore, they seek a reduction in the amount of the bank guarantee.

The Counsel for the appellant, Mr Hardik Modh submitted that the subject goods were seized alongwith other consignment under common seizure.

The Tribunal relied on the Order dated 16-07-2020 in the case of Wittenia Multi trading (P) Ltd. which had the same facts and it was held that,

  1. We have heard both sides and perused the record. In the overall facts of the case, we find that there is prima-facie case of malafide on the part of the appellant to claim exemption fraudulently. However, this is not our conclusion on the merits of the case as the detailed investigation is pending. We also find that the appellant requested for provisional release for re-export of the goods. In that case, a lenient view can be taken. Needless to say that the appellant shall clear the goods on payment of duty as assessed by the Customs. In these circumstances, we are of the view that the appellant deserve for some leniency as regards terms of provisional release of the seized goods. Accordingly, we hold that goods may be provisionally released on furnishing bond of total value with bank guarantee of the amount of 50% of the total duty.

Thus, the appeal is partly allowed in the above terms. Early hearing application also disposed of.”

The Tribunal allowed the appeal coming to the conclusion the seized goods shall be released on furnishing bond of total value of the goods with a bank guarantee of the amount of 50% of the total duty.[MM9 International v. C.C.- Mundra, 2021 SCC OnLine CESTAT 82, decided on 04-02-2021]


Suchita Shukla, Editorial Assistant has put this story together.

Case BriefsHigh Courts

Uttaranchal High Court: “Whether cash can be deposited in lieu of surety bond for bail” was the issue decided by Alok Kumar Verma, J., in the present application filed by an accused of foreign nation.

The applicant was accused of offences punishable under Sections 420, 120-B of the Penal Code, 1860 Section 66 of the Information Technology Act, 2000 and Section 14 of the Foreigners Act, 1946. The same application to deposit cash instead of bond to be released on bail was filed before the Additional Chief Judicial Magistrate, which was rejected and same is challenged in the present peition.

However, the bail was granted under certain terms and conditions and one of such condition was “the applicant shall be released on bail on furnishing a bond with two sureties of like amount, one of whom must be a local surety, to the satisfaction of the court concerned”. The applicant has apprised the Court that the passport was deposited before the concerned Magistrate and because the applicant was a foreigner, he was unable to arrange sureties. Therefore, he offered to deposit cash amount in lieu of executing surety bond.

Counsel for the applicant Lalit Sharma, vehemently argued on the basis of Section 445 of Criminal Procedure Code, 1973 which states ‘Deposit instead of Recognizance’. Hence, it was contended that when the applicant was unable to provide surety because of his nationality, Section 445 of the Code will come into play. Therefore, the cash deposit must be allowed instead of surety and bail should be granted.

Held, “the applicant-accused is permitted to deposit the cash amount, a reasonable amount, to the satisfaction of the court concerned, in lieu of executing surety bonds”.[David Morrison v. State of Uttrakhand,  2021 SCC OnLine Utt 49, decided on 13-01-2021]


Aastha Sharma, Editorial Assistant has put this story together

Hot Off The PressNews

On the basis of specific intelligence, under the direction of the Commissioner of Customs (Preventive), Bhubaneswar Shri Debashish Sahu, investigation was initiated and relevant business premises of Exporter and Customs House Agent at various places was searched.

Prima facie evasion of Customs duty to the extent of Rs 8,07,66,314/- (Rupees Eight Crore Seven Lakh Sixty-Six Thousand Three Hundred and Fourteen) only by M/s. B S Minerals, Keonjhar, Odisha-758001 on Iron Ore fines which was to be exported from Paradeep, India to Main Port, China in-vessel “MV MAGNUM FORTUNE” was detected by the Customs officials.

Thereafter, 52051 MT of goods valued at Rs.26,92,21,045/-were seized. Subsequently, the exporter deposited Customs duty to the tune of Rs.8,07,66,314/- (Rupees Eight Crore Seven Lakh Sixty Six Thousand Three Hundred and Fourteen) only and submitted Bank Guarantee of Rs. One Crore to the government exchequer for taking the provisional release of the goods in addition to depositing a Bond of Rs 5.4 Crore with the Customs Authorities.

Further investigation is under progress.

PRESS RELEASE


CBIC

[Press Release dt. 29-12-2020]

Case BriefsHigh Courts

Kerala High Court: R. Narayana Pisharadi, J., while observing the instant matter asked the trial court to reconsider the question whether the suit document is a bond or an agreement.

The instant suit was filed for the realisation of money and certain other reliefs. The claim for money was based on the document allegedly executed by the first defendant in favour of the plaintiff.

When the said document was tendered in evidence, the defendants raised an objection to the marking of the document on the ground that it is a bond and it is an insufficiently stamped document.

Trial Court in its decision had found that the suit document was only an agreement and not a bond.

Defendants had also raised an objection contending that the document was a mortgage deed and it should be compulsorily registrable.

Analysis

Section 2(a) of the Kerala Stamp Act, 1959 defined a bond as follows:

“(a) ‘bond’ includes —
(i) any instrument whereby a person

obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;

(ii) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and

(iii) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another;”

It was observed that the above-stated definition is identical to the definition of bond in Section 2(5) of the Indian Stamp Act, 1899. The said definition includes all types of instruments.

Petitioner’s Senior Counsel submitted that the suit document comes under Clause (ii) mentioned above. But, learned counsel for the first respondent would contend that in order to attract Clause (ii) of Section 2(a) of the Act, the obligation created by the document shall be to pay a definite or specified amount and not something to be determined by the Court.

Further, it was submitted that in the instant case the document does not create an obligation to pay a definite or specified amount and therefore, it is not a bond but only agreement.

Suit document is styled as an agreement. But, for finding out the true character of the instrument, one has to read the instrument as a whole and then find out the dominant purpose. The test is not what the document calls itself or what form it adopts but what is the true meaning and effect of the terms contained therein.

Delhi High Court’s decision in Hamdard Dawakhana (Wakf),1967 SCC OnLine Del 36, the full bench of the court considered the distinction between the bond and an agreement. In this decision, it was observed that it is trite to say that every bond is an agreement and so is the case with a mortgage or sale or exchange but what the court has to see is whether that agreement has acquired the character of a “bond”.

Distinguishing Feature of a Bond

Bond has an obligation to pay money created by the instrument itself.

A document which evidences acknowledgement of an antecedent obligation or a pre-existing liability would not normally become a bond.

The real test to decide whether a particular document is a bond or not is to find out, after reading the document as a whole, whether an obligation is created by the document itself or whether it is merely an acknowledgment of a pre-existing liability.

Where the obligation is a pre-existing one, the subsequent document or the document executed subsequently, giving the nature of the obligation or the terms and conditions of the contract, shall be a mere agreement.

Trial Court failed to take into consideration the fact that, as per the terms of the document, a liability is created for a fixed amount, that is, the amount borrowed and 10% of that amount. Adding to this, it also did not consider whether the stipulation in the document is sufficient to treat it as a bond. Principles mentioned in the Supreme Court cases have also not been referred by the trial court.

High Court allowed the original petition and further stated that the trial court shall consider the question of whether the suit document is a bond or an agreement. [A.V. Ravi v. M.M. Abdulkhadar,  2020 SCC OnLine Ker 8185, decided on 01-12-2020]