Tribunal Upholds EPCG Refund, Dismisses Revenue's Appeal for Stay. Bank guarantees not duty payment.

The Tribunal upheld the decision of the lower appellate authority in favor of the refund claimant under the EPCG scheme, dismissing the Revenue's appeal for a stay of operation. The Tribunal ruled that bank guarantees do not amount to payment of duty, citing a Supreme Court ruling. The Revenue's argument that previous Tribunal decisions were under appeal in the High Court was rejected, as the Supreme Court ruling was deemed applicable to the case.

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Issues involved: Stay of operation of an order granting refund to the assessee under EPCG scheme.

Summary:
The Revenue filed an application for stay of operation of an order granting refund of Rs. 6,32,000 to the assessee under the EPCG scheme. The assessee had obtained provisional release of capital goods by executing bank guarantees. The original authority allowed the refund claim after the assessee produced evidence of fulfilling export obligations. The Revenue appealed against this decision.

The lower appellate authority relied on previous Tribunal decisions where bank guarantees were ordered to be encashed to the assessee as they did not represent duty. The Revenue argued that the Tribunal's decisions were not final as they were under appeal in the High Court. However, the consultant for the respondents cited a Supreme Court ruling stating that bank guarantees do not amount to payment of duty.

The Tribunal found that the Supreme Court ruling applied to the present case and upheld the decision of the lower appellate authority in favor of the refund claimant. The Tribunal dismissed the Revenue's appeal and the stay petition, as the issue was already covered by the Supreme Court ruling.

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