1979 (10) TMI 231 - HC - Customs

Court upholds Government's export policy change on silver compounds, rejecting promissory estoppel claim

Nirmal Construction & Finance Company and Anr. Versus Union of India and Ors.

Nirmal Construction & Finance Company and Anr. Versus Union of India and Ors. - TMI Issues Involved:1. Applicability of Promissory Estoppel against the Government.2. Interpretation of Export Control Order and its amendments.3. Classification of Argenti Nitras under the Export Control Order.4. Validity of the Government's policy change on export restrictions.5. Impact of pre-ban commitments on export licenses.Detailed Analysis:1. Applicability of Promissory Estoppel against the Government:The judgment addresses whether promissory estoppel can bind the Government. It concludes that promissory estoppel is available against ordinary administrative action but not against policy decisions based on general considerations and public interest. The court emphasizes that the Government's representation must be clear and unambiguous, and the petitioners must have changed their position by acting on it.2. Interpretation of Export Control Order and its Amendments:The Export Control Order, 1977, issued under the Imports and Exports (Control) Act, 1947, regulates the export of goods. The court discusses the amendments made to item 77(ii) of Part B of Schedule I, which initially allowed the export of certain silver compounds but later banned their export. The amendments were challenged for their validity, but the court upheld them, stating that the Government has the discretion to change export policies based on national interest.3. Classification of Argenti Nitras under the Export Control Order:The petitioners argued that Argenti Nitras, a drug containing more than 50% silver, was not a silver compound under item 77(ii). The court, however, held that Argenti Nitras is a silver compound within the meaning of item 77(ii) and is thus subject to the export restrictions. The court relied on technical definitions and previous judgments to conclude that Argenti Nitras did not cease to be a silver compound even after processing.4. Validity of the Government's Policy Change on Export Restrictions:The court examined whether the Government's policy change on 30th March 1979, which restricted the export of silver compounds, was valid. The court held that the Government's policy decisions, especially those involving national interest and public welfare, are not subject to judicial review. The policy change was deemed necessary due to the country's foreign exchange position and other national interests.5. Impact of Pre-Ban Commitments on Export Licenses:The petitioners claimed that their pre-ban commitments should be honored based on the Export Policy 1978-79 and paragraph 316 of the Hand Book of Import-Export Procedures. The court found that the representation by the Government was not unconditional and that pre-ban commitments did not confer an absolute right to export. The Government's discretion to change the policy and deny export licenses was upheld, considering the public interest and the need to conserve silver.Conclusion:The court dismissed the writ petitions, holding that the Government's policy change was valid and necessary for national interest. The doctrine of promissory estoppel was not applicable as the Government's representation was conditional and subject to change. The classification of Argenti Nitras as a silver compound under the Export Control Order was upheld, and the pre-ban commitments did not guarantee the issuance of export licenses.