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2006 (2) TMI 149 - HC - Income TaxDisallowance of excise duty liabilities - Furnishing of bank guarantee towards payment of excise duty liabilities - the bank guarantee furnished by the assessee, which was taken by the assessee by depositing certain amount in bank fixed deposit as margin, did not tantamount to actual payment and so section 43B is applicable? - HELD THAT:- The expression employed in the section 43, is "actually paid". In view of the non obstante clause contained in the section, it is not permissible to refer to the expression "paid" as defined u/s 43(2) of the Act or under any other provision of the Act. Hence, the plain meaning of the words "actually paid" is required to be taken into consideration. The word "actual" has been defined as something real in opposition to constructive or speculative, "Actually" means really, truly in fact. Therefore, the plain meaning of the expression" actually paid" means that the sum should have been actually paid to the coffers of the Revenue, i.e., really paid, and not constructively. Importing any other meaning, as is sought to be canvassed by the learned advocate for the appellant, would amount to doing violence to the plain meaning of the statute. When the words of the statute are clear and unambiguous there is no need to adopt any other meaning or provision of the Act. A bank guarantee is in the nature of a security or a guarantee, which imposes an obligation on the bank to make payment in terms of the bank guarantee, upon the happening of a contingency on the occurrence of which the guarantee becomes enforceable. In the facts of the present case, by furnishing the bank guarantees pursuant to the order of the Supreme Court, the appellants had merely created a right in favour of the Excise Department to enforce the payment of excise duty in the event of their succeeding in the pending litigation. The same is not equivalent to actual payment of tax or duty by way of which funds would be available for meeting the Government expenditure, etc. The apex court in the case of Oswal Agro Mills Ltd. v. Asst. Collector of Central Excise [1994 (2) TMI 57 - SUPREME COURT] was called upon to decide as to whether it can be said that furnishing of a bank guarantee for all or part of the disputed excise duty pursuant to an order of the court is equivalent to payment of the amount of excise duty. It can be said that the bank guarantee had been furnished by the appellants towards excise duty liabilities, though pursuant to directions of the Supreme Court, primarily to avoid making payment of excise duty to the Department. Hence, in view of the principles enunciated by the apex court in Somaiya Organics (India) Ltd. v. State of U. P.[2001 (4) TMI 84 - SUPREME COURT], it cannot be said that the furnishing of bank guarantee towards payment of excise duty liabilities amounts to actual payment as envisaged by the provisions of section 43B of the Act. Thus, there cannot be said to be any infirmity in the view taken by the Tribunal. The question is answered accordingly. The appeals are, accordingly, dismissed with no order as to costs.
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