Court affirms promissory estoppel, upholds duty-free import facility for integrated manufacturing process.

The court upheld the writ petitioner's claims, applying the principle of promissory estoppel and recognizing the integrated nature of the manufacturing process. The procedural fairness of the Board of Approval's decision-making process was also emphasized. The judgment of the learned single Judge was affirmed, dismissing the appeal and allowing the petitioner to retain the duty-free import facility for the long belt conveyor system.

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Issues Involved:
1. Withdrawal of exemption by the Board of Approval (BOA).
2. Promissory estoppel and misrepresentation.
3. Inclusion of long belt conveyor system in the Export Oriented Unit (EOU) premises.
4. Procedural fairness and natural justice.

Detailed Analysis:

1. Withdrawal of Exemption by the Board of Approval (BOA):
The primary issue was the withdrawal of an exemption by the BOA, which had initially granted the writ petitioner exemption from import duty. The BOA's decision dated 23-9-2004, which revoked the earlier exemption granted on 31-5-2004, was quashed by the learned single Judge. The demand notice dated 8-4-2009 issued by the appellants was also set aside, and they were restrained from enforcing the BOA decision dated 23-9-2004.

2. Promissory Estoppel and Misrepresentation:
The writ petitioner argued that the withdrawal of the duty-free import facility for the long conveyor belt system was against the principle of promissory estoppel, as they had made substantial investments based on the initial approval. The appellants contended that the petitioner had misrepresented facts, justifying the withdrawal. However, the court found no evidence of misrepresentation by the writ petitioner. The project report submitted in July 2002 clearly mentioned the installation of the long belt conveyor, and the capital cost included the conveyor system. Thus, the court upheld the principle of promissory estoppel, noting that the petitioner had made investments based on the BOA's approval.

3. Inclusion of Long Belt Conveyor System in the Export Oriented Unit (EOU) Premises:
The petitioner sought to include the long belt conveyor system within the EOU premises, arguing that it was an integral part of the manufacturing process. The BOA had initially approved the procurement of the conveyor belt as capital goods for duty-free import, recognizing the project as a composite cement plant involving units in both India and Bangladesh. The court agreed with the petitioner, noting that the conveyor belt was not merely a means of transportation but a machine essential for the production process. The court cited precedents like Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar, and Vikram Cement v. Commissioner of Central Excise, Indore, to support the view that integrated processes in manufacturing should be considered as a whole.

4. Procedural Fairness and Natural Justice:
The court also addressed the procedural fairness of the BOA's decision-making process. The earlier decision to withdraw the exemption was made without giving the petitioner an opportunity to be heard, violating principles of natural justice. The court noted that the petitioner was not provided with minutes of the BOA meetings held on 3-6-2008, 29-8-2008, and 19-11-2008, and no reasons were given for rejecting their application. The court emphasized that decisions affecting substantial investments should be made transparently and with due process.

Conclusion:
The court upheld the writ petitioner's claims, finding no misrepresentation and recognizing the integrated nature of the manufacturing process. The principle of promissory estoppel was applied, and the procedural lapses by the BOA were highlighted. The judgment of the learned single Judge was affirmed, and the appeal was dismissed, ensuring that the petitioner retained the duty-free import facility for the long belt conveyor system.

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