2013 (2) TMI 145 - AT - Customs

Encashing the bank guarantee - Furnish by applicant - to complied with the condition of the stay order dated 18.12.2006 - The bank guarantee is alive till 2015 - Obtained extension of stay vide order dated 01.08.2012 - Meanwhile department encash bank guarantee - Held that - As the applicant has complied with the condition of the stay order dated 18.12.2006 by executing bank guarantee of Rs.50 lakhs and the same is alive till 2015 and also obtained extension of stay vide order dated 01.08.2012, we direct the respondent to refund the amount of Rs.50 lakhs within seven days - In the favour of assessee

Summary

Issues:
1. Application for refund of amount received by encashing bank guarantee.
2. Compliance with conditions of stay order and extension of stay.

Analysis:
1. The applicant filed an application seeking the return of Rs.50,00,000 received by the respondent by encashing the bank guarantee. The applicant had obtained a stay from the Tribunal on furnishing the bank guarantee, which was valid until 2015. Despite moving an application for an extension of stay and informing the department, the bank guarantee was encashed before the stay extension order was passed. The Tribunal acknowledged that the applicant had complied with the conditions of the stay order and had obtained an extension of stay. Therefore, the Tribunal directed the respondent to refund the amount of Rs.50 lakhs within seven days, with the condition that the bank guarantee must remain active until the appeal is disposed of.

2. The Tribunal found that the applicant had fulfilled the condition of the stay order by providing the bank guarantee and had also obtained an extension of stay. Consequently, the Tribunal ordered the respondent to refund the amount of Rs.50 lakhs within a specified timeframe. The directive emphasized the importance of keeping the bank guarantee active until the appeal process reaches a conclusion. By issuing this order, the Tribunal ensured that the applicant's rights were protected while maintaining the necessary financial security through the bank guarantee.

3. The miscellaneous application was disposed of by the Tribunal in the terms outlined above. The decision was made in open court and provided a clear resolution to the issue raised by the applicant regarding the encashment of the bank guarantee. The Tribunal's judgment highlighted the importance of adherence to the conditions of stay orders and the significance of timely communication and actions in such legal matters.