Delegated policy amendment on terminal excise duty refund upheld; promissory estoppel cannot bar a public-interest duty parity change.

The Delhi High Court upheld the amendment to paragraph 10.11 of the Handbook of Procedure restricting refund of terminal excise duty for supplies to power projects. It held that the policy framework empowered the Central Government and the DGFT to prescribe implementation procedures, and that the amendment merely modified a procedural entitlement within delegated authority, so it was not ultra vires the Act or the Export Import Policy. The Court also rejected the challenge based on arbitrariness and promissory estoppel, accepting that the change was made to maintain duty parity and serve public interest. The writ petition was dismissed and the restriction was sustained.

---

---

Issues: (i) Whether the amendment to paragraph 10.11 of the Handbook of Procedure, which restricted refund of terminal excise duty for supplies to power projects, was ultra vires Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 and paragraph 4.11 of the Export Import Policy, 1997-2002; (ii) Whether withdrawal of the terminal excise duty refund benefit was arbitrary or barred by promissory estoppel under Article 14 of the Constitution of India.

Issue (i): Whether the amendment to paragraph 10.11 of the Handbook of Procedure, which restricted refund of terminal excise duty for supplies to power projects, was ultra vires Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 and paragraph 4.11 of the Export Import Policy, 1997-2002.

Analysis: The policy framework authorised the Central Government to notify the export-import policy and permitted the Director General of Foreign Trade to prescribe implementation procedures through the Handbook of Procedure. The disputed refund benefit for deemed exports had been introduced through the amended procedure itself and was linked to the incidence of excise duty, with the refund limited to a specified extent. The amendment only modified the procedural entitlement under the policy framework and did not exceed the delegated power.

Conclusion: The amendment was not ultra vires the Act or the policy.

Issue (ii): Whether withdrawal of the terminal excise duty refund benefit was arbitrary or barred by promissory estoppel under Article 14 of the Constitution of India.

Analysis: The refund benefit was introduced and defined within the policy structure as a duty-linked incentive for deemed exports. The Court accepted the governmental explanation that the change was made to maintain parity in the duty structure and to protect public interest, and held that promissory estoppel cannot prevail where enforcement of the earlier position would be inequitable or contrary to larger public interest. The amendment was therefore neither arbitrary nor unconstitutional.

Conclusion: The challenge based on arbitrariness and promissory estoppel failed.

Final Conclusion: The writ petition was dismissed on merits, and the impugned restriction on terminal excise duty refund for the relevant supplies was upheld.

Ratio Decidendi: A policy-based fiscal benefit tied to duty incidence may be modified within the scope of delegated power, and promissory estoppel will not prevent such modification where it is justified by public interest and maintains the intended duty parity.

---