1992 (10) TMI 99 - HC - Central Excise

Summary

Issues:
Enforcement of Bank Guarantee by Union of India against Registry's refusal.

Analysis:
The Union of India sought relief against the Registry of the High Court for not enforcing a Bank guarantee as per the Supreme Court's decision. The petitioners had filed a Writ Petition seeking refund of excise duty, and the Union of India was entitled to enforce the Bank guarantee after the petition was dismissed. The Supreme Court directed the petitioners to furnish Bank guarantees for 50% of the duty liability, allowing the Union of India to recover the remaining 50%. The Union of India approached the Registry for enforcement, but the petitioners objected, citing a clarificatory order by the Supreme Court regarding the assessable value. The Single Judge directed that the Bank guarantees not be encashed until reassessment, but the Division Bench disagreed, stating that the Bank guarantee should be enforced immediately as per the Supreme Court's order.

The petitioners appealed the Assistant Collector's order to pay a specific amount, leading to pending proceedings before the Appellate Collector. The Union of India, dissatisfied with the delay in enforcing the Bank guarantee, moved the Registry for directions. The Division Bench held that the Bank guarantee must be enforced without delay, rejecting the petitioners' argument that the Bank guarantee should not be encashed until the matter is finally determined by the Supreme Court. The Bench emphasized that the petitioners' appeal against the Assistant Collector's order does not affect the Union of India's right to enforce the Bank guarantee.

The petitioners contended that the Supreme Court's clarificatory order implied a stay on encashing the Bank guarantee until reassessment. However, the Division Bench disagreed, stating that there was no such direction in the clarificatory order. The Bench directed the Registry to encash the Bank guarantee as demanded by the Union of India, allowing a three-week period for the petitioners to seek clarification from the Supreme Court. The encashment was set for a specific date unless directed otherwise by the Supreme Court.