Disposal restraint on confiscated plant and machinery lifted once bank guarantee furnished, as protective condition was no longer needed.

A restraint on disposal of plant and machinery imposed as part of a stay and confiscation-related condition was held unnecessary to continue once the applicant furnished a bank guarantee. The Tribunal reasoned that the disposal restriction was only incidental to the earlier protective order and did not need to remain in force merely because duty recovery was apprehended. On execution of a bank guarantee, the restriction was lifted and the modification application was allowed in favour of the assessee.

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Issues: Whether the condition restraining disposal of the plant and machinery ordered to be confiscated should be lifted on execution of a bank guarantee.

Analysis: The restriction on disposal had been imposed only as an incident of the stay order and the confiscation-related condition. The Tribunal found no reason to continue the restraint merely because recovery of duty was apprehended, and accepted that the applicant could secure the position by furnishing a bank guarantee.

Conclusion: The restriction on disposal of the plant and machinery was lifted on execution of a bank guarantee for Rs. 1 lakh, and the modification application was allowed in favour of the assessee.

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