Government company status under the CBEC Manual supports exemption from bond and bank guarantee for provisional assessment.

A Central Government public sector undertaking was treated as a government company because the President of India held 63.06% of its share capital and the Ministry controlled director appointments and managerial affairs. On that basis, it fell within paragraph 6.1 of Chapter 14 of the CBEC Manual, not paragraph 6.2, and was therefore entitled to provisional assessment without executing a bond or furnishing a bank guarantee. The departmental insistence on an enhanced bond and bank guarantee was not sustainable.

---

---

Issues: Whether the appellant, being a Central Government public sector undertaking and a government company, was entitled to exemption from execution of bond and furnishing of bank guarantee for provisional assessment of excisable goods under the CBEC Manual.

Analysis: The appellant was found to hold 63.06% of its paid-up share capital through the President of India and to be a government company within the meaning of Section 2(45) of the Companies Act, 2013 and Section 617 of the Companies Act, 1956. The records also showed that the Ministry of Heavy Industries and Public Enterprises controlled the appointment of directors and other service-related and managerial matters, establishing that the undertaking was owned and managed by the Government of India through the Ministry. On that basis, the Tribunal held that the appellant fell within paragraph 6.1 of Chapter 14 of the CBEC Manual and not within paragraph 6.2.

Conclusion: The appellant was entitled to the benefit of non-execution of bond and non-furnishing of bank guarantee for provisional assessment, and the departmental insistence on enhanced bond and bank guarantee was unsustainable.

---