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1994 (2) TMI 57 - SC - Central ExciseWhether it can be said that the 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? Held that:- The answer is in the negative.The bank guarantee is security for the Revenue, that in the event the Revenue succeeds its dues will be recoverable, being backed by the guarantee of a bank. In the event, however, unlikely, of the bank refusing to honour its guarantee it would be necessary for the Revenue or, where the bank guarantee is in favour of the principal administrative officer of the Court, that officer to file a suit against the bank for the amount due upon the bank guarantee. The amount of the disputed tax or duty that is secured by a bank guarantee cannot, therefore, be held to be paid to the Revenue. There is no question of its refund, and Section 11B is not attracted. The bank guarantees given by the appellants were not properly the subject matter of the writ petition before the High Court and the High Court was in error in directing the appellants to renew the same. We reiterate our direction to the 1st and 2nd respondents forthwith to re-pay to the State Bank of Patiala, Overseas Branch, Millar Ganj, Ludhiana, the amount of ₹ 1,18,00,000/- collected upon the bank guarantees within two weeks - review petition is dismissed.
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