2018 (7) TMI 15 - HC - Central Excise

Honor of Bank Guarantee - The bank guarantee was sought to be enforced by the impugned order on account of the fact that the petitioner did not complete the export obligation and did not produce the discharge certificate - revised rehabilitation scheme - Held that - What is important to note is that the present relief granted to the petitioner is under revised rehabilitation scheme - the first respondent has to reconsider the matter and pass a fresh order, since time has been granted to the petitioner for complying with the export obligation. Appeal allowed by way of remand.

Summary

Issues: Challenge to order enforcing bank guarantee under EPCG scheme; Interpretation of rehabilitation scheme clauses; Validity of bank guarantee; Consideration of Central Excise and Customs duty in revival scheme; Remand for fresh consideration by first respondent.

In this judgment, the petitioner challenged an order by the first respondent requesting enforcement of a bank guarantee under the EPCG scheme due to non-compliance with export obligations. The petitioner, a sick industrial undertaking pending before the BIFR, argued that as per a modified rehabilitation scheme, they were granted twelve years to fulfill the export obligation, which would end in 2020-21. The second respondent confirmed the validity of the bank guarantee. The first respondent, however, noted that Central Excise and Customs duty were not covered in the revival scheme but acknowledged the relief under the revised rehabilitation scheme. The court remanded the matter to the first respondent for fresh consideration, directing them to review based on the revised rehabilitation scheme, grant a personal hearing, and keep the bank guarantee valid until new orders are issued. No costs were awarded, and the connected miscellaneous petition was closed.