Bank Guarantee Cannot Be Encashed Without Permission During Appeal Under Section 27 Customs Act

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....The appellant challenged the encashment of a bank guarantee by the revenue during the pendency of an appeal before the Tribunal. The Tribunal held that the bank guarantee, furnished as security pending final adjudication, does not constitute payment of duty and cannot be encashed without the Tribunal's permission. Relying on Supreme Court precedents, the Tribunal found the revenue's action improper and contrary to Section 27 of the Customs Act, which cannot be used to unjustly retain amounts not legally due. The impugned order permitting encashment was set aside, and the revenue was directed to refund the amount secured by the bank guarantee to the appellant forthwith. The appeal was accordingly allowed.....