IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE SECOND DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE THE CHIEF JUSTICE SRI ANIL R. DAVE AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 7511 of 2009 Between: CDR Healthcare Limited, Hyderabad Rep. by its Director D. Bhaskar Reddy C/o. Gaganmahal Nursing Home 1-2-379, Domalguda, Hyderabad. ..... PETITIONER AND 1 The Commissioner of Customs (Appeals) Customs House, Chennai 2 The Commissioner of Central Excise & Service Tax, Basheerbagh, Hyderabad. 3 The Deputy Commissioner, Air Cargo Complex Meenambakkam, Chennai 4 The Chief Manager, Indian Bank, Himayatnagar Branch, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ or order/s more particularly one in the nature of writ of Mandamus declaring the letter dt.1-4-2009 bearing No.CUS/ARC/Hyd-II/35/2003 issued by the second respondent seeking extension of the validity of the bank guarantee bearing No.17/2008-2009 dt.11-10-2008 for a further period of one year from 9-4-2009 as being illegal, arbitrary and unconstitutional and consequently direct the fourth respondent to release the said bank guarantee amount to the petitioner. Counsel for the Petitioner : MR. B. VIJAYSEN REDDY Counsel for the Respondent Nos.1 to 3: MR. A. RAJASHEKAR REDDY (ASST. SOLICITOR GENERAL) Counsel for the Respondent No.4 : MR. AMBADIPUDI SATYANARAYANA The Court made the following : ORDER: (per Sri Anil R. Dave, CJ) Rule. Service of Notice is waived by Sri A. Rajasekhar Reddy, Assistant Solicitor General, for respondent Nos.1 to 3, and Sri Ambadipudi Satyanarayana, learned Advocate, for respondent No.4. At the request of the learned Advocates, the petition is finally heard today. The grievance which has been ventilated in the petition is that the petitioner has been constrained to keep bank guarantee No.17/2008-2009 in force till the recovery of arrears attains finality. The case of the petitioner is that a sum of Rs.1,45,88,840/- was demanded by respondent No.3 by way of duty from the petitioner. On appeal, by way of interim order, first respondent directed the petitioner to deposit 50% of the demanded amount. As the petitioner failed to deposit the amount, respondent No.1 dismissed the appeal. Aggrieved by the same, the petitioner filed an appeal before the Central Excise & Sales Tax Appellate Tribunal (CESTAT). The Tribunal granted stay on depositing Rs.37,00,000/- by the petitioner and by order dt.1.8.2007 allowed the appeal of the petitioner and directed respondent No.1 to dispose of the petitioner’s appeal on merits. During the pendency of this litigation, as respondent No.2 sought to attach the property of the petitioner, it filed Writ Petition No.8069 of 2008. This Court by order dt.30.4.2008 disposed of the Writ Petition directing the respondents to release the attachment on the property on furnishing bank guarantee for Rs.1,00,00,000/-. Accordingly, the petitioner had furnished bank guarantee through fourth respondent banker. Later, the first appellate authority vide order dt.24.11.2008 allowed the appeal of the petitioner and reduced the demand to Rs.43,17,927/- modifying the order of the original authority. The case of the petitioner, is that as it has already paid Rs.37,00,000/- lakhs pursuant to order of the Tribunal and as the demand arrived at by the respondent authorities is Rs.43,17,927/- it is liable to pay Rs.6,17,927/- only. As respondent No.2 has issued a letter to the petitioner to extend the validity of the bank guarantee for a further period of one year, present petition is filed. The case of the petitioner is that having succeeded in the appeal, the petitioner should not have been asked to keep the bank guarantee alive. The case of the respondent authorities is that the order passed in the appeal reducing the demand has been further challenge before the CESTAT. It is pertinent to note that the appeal has been admitted. However, the application for stay filed by the respondent authorities has been rejected. In the circumstances, in our opinion, the petitioner cannot be constrained to keep the bank guarantee alive. During the pendency of this petition, by order dt.01.5.2009 the respondent No.4 - bank was directed to release Rs.85,00,000/- from the sum of Rs.1,00,00,000/-. The petitioner was directed to retain Rs.15,00,000/- with respondent No.4 – Bank and thus a sum of Rs.15,00,000/- was lying with respondent No.4 – Bank which belongs to the petitioner. It is to be noted that the learned Assistant Solicitor General has submitted that still some amount has to be paid by the petitioner, but he is not able to state the amount which the petitioner has to pay. It is pertinent to note that the respondent authorities were also asked to furnish details of the amount payable by the petitioner on 1.5.2009, but till now no details have been given by the respondent authorities. Hence, we are constrained to pass this order so that the money belonging to the petitioner would not remain blocked with respondent No.4. If any amount is still payable by the petitioner, respondent No.2 shall give details about the amount to be paid by the petitioner to the petitioner and respondent No.4 – Bank within four weeks from the date of service of this order on respondent No.2. If respondent No.2 does not give details of the amount payable by the petitioner, it would be presumed by the petitioner that no amount is payable by the petitioner and in that event, the amount of Rs.15,00,000/- retained by respondent No.4 – bank shall be released in favour of the petitioner. If any intimation with regard to the amount payable by the petitioner is given by respondent No.2, the amount so determined shall be recovered from the amount which is lying with respondent No.4 bank and the balance amount shall be returned to the petitioner. In view of the above order, the petition stands disposed of with no order as to costs. The petitioner is permitted to effect personal service of this order upon respondent Nos.2 and 4. ANIL R. DAVE, CJ RAMESH RANGANATHAN, J 02-07-2009 bnr