Exemption notification and promissory reliance barred denial of concessional additional duty on imported goods.

An exemption notification under the Central Excise Rules was treated as relevant to liability for additional duty under the Customs Tariff Act where the imported goods satisfied the same end-use and procedural conditions, so concessional treatment could not be denied merely because the notification was framed under excise law. The court also applied the principle that a public authority cannot withdraw a representation after the affected party has relied on it and complied with the stipulated requirements, including furnishing bonds and end-use certificates. On that basis, the customs authorities were held bound by their prior confirmation and could not revoke the concession because of an audit objection.

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Issues: (i) Whether an exemption notification issued under the Central Excise Rules could be relied upon while determining liability to additional duty under the Customs Tariff Act. (ii) Whether the customs authorities could resile from their prior representation confirming concessional additional duty after the petitioners complied with the stipulated conditions.

Issue (i): Whether an exemption notification issued under the Central Excise Rules could be relied upon while determining liability to additional duty under the Customs Tariff Act.

Analysis: The notification granted exemption from excise duty subject to specified conditions, including end-use requirements and compliance with the prescribed procedure. The reasoning adopted treated the exemption as relevant to the levy of additional duty on imported goods, and held that if the imported goods satisfied the same conditions, the benefit could not be denied merely because the notification was framed under the Central Excise Rules.

Conclusion: Yes. The exemption notification was applicable in determining the additional duty payable on the imported ethyl benzene.

Issue (ii): Whether the customs authorities could resile from their prior representation confirming concessional additional duty after the petitioners complied with the stipulated conditions.

Analysis: The petitioners had acted upon the customs authorities' confirmation and furnished the required bonds and end-use certificates. Having induced compliance with the representation, the authorities could not withdraw the concession merely because of an audit objection. The conduct attracted the principle that a public authority cannot go back on a representation on which the affected party has acted to its detriment.

Conclusion: No. The customs authorities were bound by their representation and could not revoke the concessional treatment on the basis of an audit objection.

Final Conclusion: The challenge succeeded, and the petitioners were entitled to relief against the demand of additional duty and enforcement on the bonds.

Ratio Decidendi: An exemption condition applicable to excise duty may govern additional duty on imported goods where the imported goods satisfy the same conditions, and a public authority is precluded from withdrawing a representation on which the affected party has acted.

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