Petitioner Company Must Deposit Funds to Avoid Bank Guarantee Encashment

The High Court directed the petitioner, a company, to deposit a specific amount within a week with the Respondent Assessing Authority to prevent the encashment of a Bank Guarantee issued to the Central Excise Department. Failure to comply would lead to the dismissal of the writ petition. The Court stressed the importance of timely filing of appeals before CESTAT, noting the petitioner's delay in filing the appeal until the Respondent Department initiated encashment action. The Court disposed of the writ petition with directions for immediate appeal filing and deposit, with the fate of the Bank Guarantee pending further orders from the Tribunal.

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Issues: Threatened encashment of Bank Guarantee, Delay in filing further appeal before CESTAT

Threatened encashment of Bank Guarantee:
The petitioner, a company, approached the High Court against the threatened encashment of a Bank Guarantee issued in favor of the Central Excise Department. The first appeal against the assessment order was dismissed by the Commissioner of Customs (Appeals). The petitioner failed to approach the second Appellate Authority within the prescribed time limit, waiting until the Respondent Department initiated action for encashment. The Court noted that the petitioner had no valid reason for the delay and should have approached the Tribunal for interim relief earlier. However, the petitioner assured the Court that they would file the second appeal immediately and deposit 50% of the demand within a week. The Court, considering the circumstances, directed the petitioner to deposit a specific amount within a week with the Respondent Assessing Authority. Failure to do so would result in the dismissal of the writ petition without further reference to the Court. If the deposit was made, the Bank Guarantee would not be encashed for 15 days, pending further orders from the Tribunal.

Delay in filing further appeal before CESTAT:
The Court emphasized the importance of timely filing of appeals, noting that the limitation period for approaching the CESTAT was 90 days from the date of receipt of the impugned order. Despite the lapse of about three months, the petitioner had not filed the appeal until the Respondent Department initiated action for encashment. The Court expressed disapproval of the delay, stating that there was no justification for waiting until the end of the limitation period. The petitioner assured the Court that they would file the appeal immediately and deposit a specific amount as directed. The Court disposed of the writ petition with the mentioned directions, emphasizing that no extension of the time period for deposit would be granted. The fate of the Bank Guarantee and the interim relief would depend on further orders from the Tribunal once the appeal was filed within the prescribed limitation period.

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