Court upholds Customs duty, rejects promissory estoppel. Bank directed to pay, petitioner denied stay.

The Court concluded that the demand for additional duty and auxiliary duty by Customs authorities was legal as it was not exempted by the relevant notification. Regarding the applicability of promissory estoppel to changes in Customs duty rates, the Court held that the principle did not apply as there was no promise or representation made regarding the stability of duty rates. The Court dismissed the application, directing the bank to deposit the required amount and ordering the petitioner to pay interest, costs, and denying the requested stay.

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Issues Involved:
1. Legality of the demand for additional duty and auxiliary duty by Customs authorities.
2. Applicability of the principle of promissory estoppel to the change in Customs duty rates.

Issue-wise Detailed Analysis:

1. Legality of the Demand for Additional Duty and Auxiliary Duty by Customs Authorities
The petitioner contended that Notification No. 216-Cus dated 1st November 1980 exempted the whole of the duty of Customs, including additional duty under Section 3 of the Customs Tariff Act, 1975, and auxiliary duties under the Finance Act. The Court examined the language of the notification and noted that it exempted only "the whole of the duty of customs leviable thereon under the said First Schedule" to the Customs Tariff Act, 1975. The Court clarified that the additional duty and auxiliary duty, although duties of Customs, were not leviable under the First Schedule and thus were not exempted by the notification. The Court concluded that the demand for additional duty and auxiliary duty was legal and not contrary to the notification.

2. Applicability of the Principle of Promissory Estoppel to the Change in Customs Duty Rates
The petitioner argued that the change in Customs duty rates effected by Notification dated 1st March 1983 was not binding on them due to the principle of promissory estoppel, asserting that they entered into the contract based on the duty rates specified in Notification No. 276/82-Cus dated 14th December 1982. The Court examined the facts and found that the contract was dated 6th November 1982, which was prior to the issuance of the 14th December 1982 notification. The Court emphasized that the notifications did not promise that the duty rates would remain unchanged for any specific period. The Court further stated that the Government has the statutory power to alter duty rates, and there was no representation or promise made to the petitioner that the rates would not change. Citing the case of Union of India & Others v. Godfrey Philips India Ltd. & Others, the Court reiterated that promissory estoppel cannot be used to prevent the Government from exercising its statutory powers. The Court concluded that there was no basis for promissory estoppel in this case.

Conclusion:
The Court discharged the Rule and dismissed the application, directing the bank to deposit the entire amount payable under the bank guarantee to the Registrar, Original Side, who would then make over the same to the Collector of Customs. The petitioner was also ordered to pay interest on the sum of Rs. 6,24,716/- from 23rd March 1983 at the rate of 10% per annum until the date of the order. Additionally, the petitioner was directed to pay the costs of the application assessed at Rs. 2,000/-. The stay requested by the petitioner was declined, and all parties were instructed to act on a signed copy of the operative portion of the judgment.

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