1989 (4) TMI 99 - HC - Central Excise

Court denies rebate extension beyond 1984 based on notification terms. Promissory estoppel inapplicable. Petition dismissed.

The Court held that the petitioners were not entitled to the rebate beyond March 31, 1984, as per the clear terms of the notification. The doctrine of ... Interpretation of statute - Exemption - Doctrine of promissory estoppel Issues Involved:1. Entitlement to rebate in Central Excise duty for a mini cement plant.2. Applicability of the doctrine of promissory estoppel.3. Validity of the Government's notification limiting the rebate period.4. Interpretation of the Press Note and Parliamentary statement regarding the rebate.Detailed Analysis:1. Entitlement to Rebate in Central Excise Duty for a Mini Cement Plant:The petitioners, a public limited company manufacturing cement, claimed entitlement to a 50% rebate in Central Excise duty for five years from the commencement of production based on assurances from the Government. The respondents had limited the rebate period to March 31, 1984, by a notification issued in May 1979. The petitioners argued that this limitation was arbitrary and that the rebate should be available for five years from the start of production, invoking the doctrine of promissory estoppel.2. Applicability of the Doctrine of Promissory Estoppel:The petitioners relied heavily on the doctrine of promissory estoppel, citing various Supreme Court rulings, including *The Union of India v. M/s. Anglo Afghan Agencies* and *M/s. Motilal Padampat Sugar Mills Co. Ltd. v. The State of Uttar Pradesh*. The doctrine holds that if a party makes a promise intending that it will be acted upon, and the other party does act on it, the promisor cannot retract the promise if it would be inequitable to do so. The petitioners argued that the Government's assurances and the Press Note constituted such a promise.3. Validity of the Government's Notification Limiting the Rebate Period:The respondents contended that the notification dated May 30, 1979, explicitly limited the rebate to March 31, 1984. They argued that the petitioners misinterpreted the notification and that the rebate was never intended to extend beyond this date. The notification was issued under Rule 8(i) of the Central Excise Rules, 1944, and was clear in its terms. The respondents also pointed out that the petitioners commenced production after the expiration of the rebate period, thus disqualifying them from the rebate.4. Interpretation of the Press Note and Parliamentary Statement:The petitioners cited a Press Note dated January 4, 1979, and a Parliamentary statement by the Minister of Industry in December 1981, which they claimed supported their entitlement to the rebate from the date of production. The Court, however, found that the Press Note did not specify that the rebate would be from the date of production. The Parliamentary statement, while mentioning a five-year rebate from the commencement of production, could not override the clear terms of the notification. The Court held that the Press Note and the notification should be read together, and the notification's explicit limitation to March 31, 1984, governed the rebate period.Conclusion:The Court concluded that the petitioners were not entitled to the rebate beyond March 31, 1984, as per the clear terms of the notification. The doctrine of promissory estoppel was not applicable because there was no unequivocal promise extending the rebate period beyond the specified date. The petition was dismissed, and no costs were awarded. The Court did not address the issue of whether the plant qualified as a mini cement plant, given the conclusion on the primary issue.