9911796707
|
Home
Issues:
Enforcement of bank guarantee by Excise Department challenged by petitioner-company under Sick Industrial Companies (Special Provisions) Act, 1985 scheme sanctioned by BIFR. Analysis: The petitioner-company contested the enforcement of the bank guarantee by the Excise Department, citing its status as a sick company under a scheme approved by the BIFR. The petitioner argued that coercive recovery of excise duty should not proceed without BIFR's permission. Additionally, the petitioner highlighted that the government agency agreed to waive a disputed excise duty liability and consider withdrawing a case for excise duty refund. The petitioner contended that the Excise Department failed to acknowledge this waiver, making the bank guarantee unenforceable. The petitioner had previously filed a suit for excise duty refund, which was decreed but overturned on appeal. During the appeal, the department deposited the amount, and the petitioner furnished a bank guarantee to access it. The Supreme Court upheld the High Court's decision, leading to the current enforcement of the bank guarantee by the Excise Department. The petitioner's argument that being a sick unit under the BIFR scheme should prevent recovery was dismissed, emphasizing that the bank's liability was separate from the petitioner's status under the Act. The court noted that under the BIFR scheme, the Excise Department's claim remained alive and enforceable until waived. The bank guarantee was issued following a Supreme Court interim order and must be enforced per the court's final decision. The petitioner's reliance on Section 18(8) of the SICA, stating the scheme's binding nature on creditors and guarantors, was rejected. The court emphasized that the scheme did not extinguish the liability towards the Excise Department or render the bank guarantee unenforceable, only requiring consideration of waiver. Consequently, the petition challenging the enforcement of the bank guarantee was dismissed.
|
