1988 (10) TMI 49 - HC - Central Excise

Promissory Estoppel Upheld for Duty Rate: Clarification on Notification as Subordinate Legislation

The court affirmed the application of the principle of promissory estoppel in the case, entitling the respondent to the concessional rate of duty for the ... Promissory estoppel - Doctrine of Issues Involved:1. Applicability of Promissory Estoppel.2. Nature and scope of the Notification under Central Excises and Salt Act, 1944.3. Whether the Notification constitutes delegated or plenary legislation.Detailed Analysis:1. Applicability of Promissory Estoppel:The primary issue revolved around whether the principle of promissory estoppel applied to the case. The respondent contended that they were entitled to a concessional rate of duty for a period of seven years from the first clearance of tyres, based on Notification No. 268/82. The learned Judge upheld this contention, applying the doctrine of promissory estoppel, as elucidated in the Supreme Court ruling in Union of India v. Godfrey Philips India Limited (1985 (22) E.L.T. 306 (S.C.) = A.I.R. 1986 S.C. 806). The court noted that the respondent had relied on the concessions promised by the government and had acted to their detriment when the concessions were withdrawn prematurely.2. Nature and Scope of the Notification under Central Excises and Salt Act, 1944:The court examined the nature of the notifications issued under the Central Excises and Salt Act, 1944, particularly Notification Nos. 268/82, 88/84, and 159/85. It was argued by the appellants that the notification was a form of delegated legislation and thus not subject to the doctrine of promissory estoppel. The court, however, distinguished between plenary and delegated legislation, emphasizing that the notification in question was indeed a form of subordinate legislation issued under Rule 8 of the Central Excise Rules, 1944.3. Whether the Notification Constitutes Delegated or Plenary Legislation:The court delved into the distinction between plenary and delegated legislation. It cited various precedents, including Queen v. Burah (5 Indian Appeals 178) and Kerala State Electricity Board v. Indian Aluminium Co. (A.I.R. 1976 S.C. 1031), to establish that the notification was a form of conditional legislation. The court concluded that since the notification was issued under Rule 8(1) of the Central Excise Rules, it constituted subordinate legislation. Consequently, the principle of promissory estoppel was applicable, as the notification did not fall under the ambit of plenary legislative power. The court rejected the appellants' argument that the notification should be treated as an act of the legislature.Conclusion:The court affirmed the order of the single Judge, holding that the principle of promissory estoppel applied to the facts of the case. The respondent was entitled to the concessional rate of duty for the full period of seven years as initially promised. The appeal was dismissed, and the order of the single Judge was upheld, with no order as to costs. The court emphasized that the principle of promissory estoppel is not negated by the fact that the notification was a form of delegated legislation.