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of <h1>Court Upholds Seizure of Dumpers, Demands Bank Guarantee for Cenvat Credit Dispute</h1> The High Court dismissed the writ petition challenging the seizure of dumpers by the 4th respondent from a cement manufacturer due to an alleged wrongful ... Seizure – Bank guarantee - wrongly claimed cenvat credit – confiscation of dumpers – dump trucks on which Cenvat Credit was irregularly availed and utilized are liable for confiscation under Rule 15 of Cenvat Credit Rules, 2004 - Held that: - principles of natural justice were followed by the Respondent Department - bank guarantee for 25% of the value of the dump trucks, in addition to execution of B-11 Bond – Appeal is dismissed Issues:1. Seizure of dumpers by the 4th respondent.2. Alleged wrongful claim of cenvat credit by the petitioner.3. Request for release of dumpers by the petitioner.4. Initiation of action under Section 11AB and 11AC of the Central Excise Act, 1944.5. Justification of requiring bank guarantee for 25% of the value of dump trucks by the 4th respondent.Analysis:The petitioner, a cement manufacturer, filed a writ petition challenging the seizure of five dumpers by the 4th respondent, valued at Rs. 7.80 Crores, due to an alleged wrongful claim of cenvat credit under the Cenvat Credit Rules, 2004. The 4th respondent initially required the petitioner to execute a B-11 bond and furnish a bank guarantee for 25% of the dumper value for release. The petitioner requested a reduction in the bank guarantee amount, which was declined by the 3rd respondent. Subsequently, the 3rd respondent initiated action under Section 11AB and 11AC of the Central Excise Act, 1944, issuing a notice to show cause for disallowance of cenvat credit, recovery of duty, and imposition of penalties. The petitioner approached the High Court questioning the requirement of a bank guarantee.The respondents contended that the ineligible cenvat credit availed by the petitioner should be recovered under Rule 14 of the Cenvat Credit Rules, 2004, and the dump trucks, on which the credit was irregularly claimed, were liable for confiscation under Rule 15 of the Rules. They argued that the show cause notice was issued post-seizure and after the goods were found liable for confiscation, following principles of natural justice. The High Court considered the arguments presented by both parties and focused on the justification of the 4th respondent in demanding a bank guarantee for 25% of the dumper value in addition to the B-11 bond.After hearing the counsel for the petitioner and the Senior Standing Counsel for Central Excise and Customs, the High Court dismissed the writ petition, concluding that the controversy centered on whether the 4th respondent's requirement for a bank guarantee was justified. The judgment did not award any costs, thereby resolving the issue raised by the petitioner regarding the seizure and release of the dump trucks and the alleged wrongful claim of cenvat credit.
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