1996 (2) TMI 144 - SC - Customs

Supreme Court overturns High Court decision on customs duty refund in P.V.C. resin import case

The Supreme Court allowed the appeal against the Bombay High Court judgment in a customs duty refund case involving P.V.C. resin import. The High Court's ... Customs duty exemption - exemption notification - modification of exemption notification - applicability of subsequent notification - promissory estoppel against the GovernmentCustoms duty exemption - modification of exemption notification - applicability of subsequent notification - Entitlement to full exemption under the earlier notification as against the modifying notification dated October 16, 1980. - HELD THAT: - The respondent imported P.V.C. resin that was initially covered by an exemption notification dated March 15, 1979 which was subsequently modified on October 16, 1980 to limit exemption to duty in excess of forty percent ad valorem. The respondent opened letters of credit and completed the transaction after the modification dated October 16, 1980. Applying the principle that a later modifying notification governs imports and transactions effected after its issuance, and following the earlier pronouncement in Kasinka Trading & Anr. v. Union of India which held that a later notification cannot be ignored even where orders were placed earlier, the respondent could not claim the full exemption under the earlier notification. The Assistant Collector's application of the later notification was correct and the High Court erred in upholding the claim to full exemption. [Paras 3, 4]The later notification of October 16, 1980 applies; the respondent is not entitled to the full exemption under the March 15, 1979 notification.Promissory estoppel against the Government - Availability of promissory estoppel to secure benefit of the earlier exemption notification. - HELD THAT: - The Court applied the principle from Kasinka Trading & Anr. which rejected a plea of promissory estoppel to sustain the earlier, broader exemption in the face of a subsequent modifying notification. Given that the letters of credit and the import transaction occurred after the modifying notification, the respondent could not invoke promissory estoppel to ignore the later change in the exemption regime. [Paras 4]Promissory estoppel cannot be invoked to claim the full exemption under the earlier notification when a later modifying notification governs the transaction.Final Conclusion: Appeal allowed; the judgment of the High Court setting aside the Assistant Collector's refusal of refund is set aside and the respondent is not entitled to the full exemption under the earlier notification. The Supreme Court allowed the appeal against the Bombay High Court judgment in a customs duty refund case involving P.V.C. resin import. The High Court had granted the refund, but the Supreme Court held that the respondent was not entitled to full exemption under an earlier notification as they opened letters of credit after a subsequent notification limiting the exemption. The Supreme Court set aside the High Court judgment, following a previous decision on similar notifications. No costs were awarded.