Conditional stay on excise duty recovery granted during appeal, subject to continued validity of bank guarantee.

Coercive recovery of a disputed excise duty demand may be restrained while an appeal remains pending, where the appellate challenge is active and adequate security is already in place. The protection can be made conditional on the petitioner maintaining a valid bank guarantee from a nationalised bank for the period of pendency, and no fresh guarantee is required if the existing guarantee satisfies that condition. The operative effect is conditional stay of recovery until final disposal of the appeal.

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Issues: Whether recovery of excise duty demanded from the petitioner could be stayed during pendency of the appeal before the Collector (Appeals), and whether such protection could be made conditional upon the furnishing and continuance of a valid bank guarantee.

Analysis: The writ petition arose from a demand of excise duty which was under challenge in appeal, where the appellate authority had already granted protection subject to a bank guarantee. The Court considered the pendency of the appeal, the conclusion of hearing before the Collector (Appeals), and the existing bank guarantee, and directed that the disputed demand should not be realised until the appeal is finally disposed of, provided a valid bank guarantee from a nationalised bank remained in force for the period of pendency. It was further directed that no fresh guarantee would be necessary if the existing guarantee complied with the direction.

Conclusion: Recovery of the disputed excise duty was restrained during pendency of the appeal, subject to a valid bank guarantee, and the petitioner obtained conditional relief.

Final Conclusion: The petitioner secured protection against coercive recovery of the excise duty demand until disposal of the pending appeal, but only on the condition that the bank guarantee remained valid for the relevant period.

Ratio Decidendi: Where an excise duty demand is under active appellate challenge and adequate security is in place, coercive recovery may be restrained pending disposal of the appeal by imposing a continuing bank guarantee condition.

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