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of <h1>Court sets aside order, emphasizes officer diligence, statutory remedies</h1> <h3>CASTROL INDIA LTD. Versus UNION OF INDIA & ORS.</h3> The Court allowed the petition and set aside the communication/order dated 29th November 2006, emphasizing that high-handed actions by the Officer could ... Central Excise – Bank guarantee – Demand confirmed till before the expiry period of limitation for filing an appeal, department cannot initiate recovery proceeding and encash the bank guarantee Issues:Bank guarantee encashment during provisional assessment finalizationAnalysis:The petitioner had provided a bank guarantee through H.D.F.C. Bank during the provisional assessment of their excise duty for the year 2003. After the finalization of the provisional assessment and the issuance of the Order-in-original on 28th November 2006, the respondent No. 3 sought to encash the bank guarantee on 29th November 2006. The petitioner, represented by Mr. Patil, highlighted the availability of an appeal under Section 35 of the Central Excise Act, 1944, which could be filed within 60 days along with a stay application against the impugned order. The petitioner argued that allowing the encashment of the bank guarantee before the filing of the stay application would render the remedy under the statute ineffective. Reference was made to the Excise Manual and the provision that no coercive action should be taken for recovering dues if a stay application is pending. The petitioner sought the quashing of the communication/order dated 29th November 2006 to prevent the nullification of statutory remedies.Mrs. Bharucha, representing the Revenue, acknowledged the steps taken by the Officer to recover the dues in accordance with the provisions of the Manual but left the decision to the Court. The Court, considering the circumstances, allowed the petition and set aside the communication dated 29th November 2006. The Court emphasized that high-handed actions by the Officer could make statutory remedies ineffective. It was noted that while officers should be diligent in collecting dues, they should not take actions that would undermine the available statutory remedies. The Court made the rule absolute in favor of the petitioner, with no order as to costs, thereby disposing of the writ petition.
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