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Issues: (i) Whether the petitioner was entitled to excise duty exemption under Notification No. 108/95 for supplies made to a project financed by JBIC and whether the certificates issued by the project implementing authority were valid; (ii) Whether cancellation of those certificates was vitiated by promissory estoppel or breach of natural justice.
Issue (i): Whether the petitioner was entitled to excise duty exemption under Notification No. 108/95 for supplies made to a project financed by JBIC and whether the certificates issued by the project implementing authority were valid.
Analysis: The exemption under the notification depended on strict fulfilment of its conditions. The notification applied only where the project was financed by a recognised international organisation declared under the United Nations (Privileges and Immunities) Act, 1947. JBIC was not shown to be such a declared international organisation. The project implementing authority could issue only the certificate contemplated by the notification and could not by that certificate enlarge the scope of the exemption or declare eligibility beyond the notification itself. Exemption provisions had to be strictly construed and the burden lay on the claimant to show compliance with the prescribed conditions.
Conclusion: The petitioner was not entitled to exemption under Notification No. 108/95, and the certificates issued by the project implementing authority were beyond authority and invalid.
Issue (ii): Whether cancellation of those certificates was vitiated by promissory estoppel or breach of natural justice.
Analysis: The plea of promissory estoppel failed because there was no clear representation by a competent authority capable of granting the exemption, and no representation in the bid documents induced the petitioner to alter its position on the basis of exemption from excise duty. The certificates were issued under a mistaken belief and could not validate an act contrary to the notification. Since the foundational condition for exemption itself was absent, cancellation of the certificates did not call for further hearing, and no enforceable equity arose against the Central authorities.
Conclusion: The cancellation of the certificates was not vitiated by promissory estoppel or breach of natural justice.
Final Conclusion: The writ challenge to the cancellation of the exemption certificates failed because the statutory conditions for excise exemption were not satisfied and no equitable or procedural ground displaced that result.
Ratio Decidendi: A claim to statutory exemption must satisfy the notification's conditions strictly, and neither an implementing authority's certificate nor promissory estoppel can confer an exemption where the claimant is not otherwise eligible under the governing notification.
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