Court rules respondent estopped from demanding excise duty after commitment to withdraw appeal

The court held that the 2nd respondent was estopped from demanding excise duty after committing to withdraw the appeal, causing the petitioner to pay. The court quashed the demand, allowing the writ petition. Despite having the authority to review the stand, the 2nd respondent was estopped from retracting the commitment made in writing. The impugned demand was quashed, ruling in favor of the petitioner, with no costs awarded.

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Issues:
1. Challenge to order demanding payment of excise duty.
2. Estoppel and authority of the respondent to issue demand.

Detailed Analysis:
Issue 1: The petitioner challenged an order demanding payment of excise duty issued by the 2nd respondent. The petitioner succeeded before the Collector (Appeals) regarding the levy of excise duty. The 2nd respondent, the Collector, initially decided to withdraw the appeal against the order-in-Appeal but later issued a demand for payment. The petitioner complied with the demand based on the 2nd respondent's letter. Subsequently, the Tribunal passed orders against the petitioner, leading to the impugned demand notice. The petitioner argued that the 2nd respondent is estopped from demanding duty after committing to withdraw the appeal. The Additional Central Government Standing Counsel contended that the demand was justified in light of the Tribunal's order. The court held that the 2nd respondent was not justified in issuing the demand after making an unequivocal statement in writing and causing the petitioner to pay the amount. The court agreed with the petitioner's estoppel argument and quashed the demand, allowing the writ petition.

Issue 2: The court considered whether the 2nd respondent had the authority to issue the demand despite committing to withdraw the appeal. The court noted that the 2nd respondent had the power to review and modify the earlier stand regarding the appeal. The court emphasized that the 2nd respondent's decision was within the authority provided under Sec. 35A(2) to file an appeal. Therefore, the court held that the 2nd respondent, despite having the power to review the stand, was estopped from retracting the commitment made in writing. As a result, the court quashed the impugned demand, ruling in favor of the petitioner. No costs were awarded in the judgment.

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