TaxTMI 
TaxTMI 
2022 (8) TMI 508
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....ed by MRC Legal for the petitioners and Ms. Asha Desai, Senior Standing Counsel for the respondents. 2. Rule. The rule is made returnable immediately at the request of and with the consent of the learned Counsel for the parties. 3. The petitioners seek the following substantive reliefs: "(a) that this Hon'ble Court may be pleased to quash the impugned letter/order dated 15.7.2020 issued from F. No. S/99-03/2020-Appg/1791 to the HDFC Bank Ltd., Siolim branch, Goa; (b) that the impugned letter/order dated 15.7.2020 issued from F. No. S/99-03/2020-Appg/1791 to the HDFC Bank Ltd., Siolim branch, Goa, are illegal and arbitrary and deserve to be quashed. Also applying the principles of restitution, it necessary ....
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.... if such an appeal succeeds, the petitioners can always be refunded the recovered amounts with interest. 7. Rival contentions now fall for our determination. 8. Mr. Chauhan, the learned Counsel for the petitioners, clarified that the petitioners were not challenging the Order in Original dated 30.06.2020 in this petition. He submitted that the petitioners had already instituted an appeal before the appellate authority challenging said order. He offered that the challenge in this petition was limited to the coercive action of encashment of Bank Guarantee with tearing hurry and even before the petitioners could institute the appeal within the prescribed period of limitation. As noted above, he referred to several decisions where Courts ....
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....xecuting the Order in Original. 12. To prevent the above situations, the CBEC has issued a circular dated 16.09.2014. Paragraph 4 of this Circular is relevant, and the same is transcribed below: "4. Recovery of the Amounts during the Pendency of Appeal: 4.1 Vide Circular No.967/1/2013 dated 1st January, 2013, Board has issued detailed instructions with regard to recovery of the amounts due to the Government during the pendency of stay applications or appeals with the appellate authority. This Circular would not apply to cases where appeal is filed after the enactment of the amended Section 35F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962. 4.2 No coercive measures for the recovery of ....
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....omewhat similar circumstances, a Co-ordinate Bench in Mahindra & Mahindra Ltd. V/s. Union of India MANU/MH/0316/1992 deprecated the encashment of Bank Guarantees even before the expiry of the statutory period of three months for instituting appeals against orders. The relevant observations in paragraph 4 read as follows: "4. In our opinion, it was highly improper on the part of the Collector and Assistant Collector to encash the bank guarantees before expiry of the statutory period of three months and in particular when petitioners had specifically informed that the stay application is fixed for hearing on 17th February 1992. Be that as it may, we accordingly direct Respondents Nos. 2 and 3 to pay entire amount recovered by encashi....
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....ka in M/s. FCI Oen Connectors Ltd. V/s. Union of India & Ors. WP No.5901/2021 decided on 23.12.2021 & Oracle India Pvt. Ltd. V/s. Union of India 2013 SCC OnLine Kar 10723. 17. In Ocean Driving Centre V/s. Union of India & Ors. 2004 (3) Mh.L.J. 55, another coordinate Bench, after referring to the declared policy of the Customs Authorities not to resort to coercive action to recover duty during the appeal period, held that the authorities cannot encash the Bank Guarantee given by the Assessee before the expiry of the statutory period available for filing an appeal along with an application for stay or waiver to pre-deposit. 18. A similar view was taken in Nobel Asset Company Ltd. V/s. Union of India 2005 SCC OnLine Bom 1710 by a ....
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....e above assurance, we find that in the present case, the respondents have acted not only in breach of the Circular of CBEC, which was binding on them but also in breach of the law laid down by the several decisions referred to above. The CBEC circular and the instructions bind the Customs Authorities. In any case, the Customs Authorities are bound by the various decisions referred above, not to mention the solemn assurance on behalf of the Union of India that in the future, adequate care would be taken to follow the law laid down by this Court scrupulously. Therefore, the impugned action is unsustainable. 23. For all the above reasons, we quash the impugned letter/order dated 15.07.2020 and direct the respondents to restore the petitione....