TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 1210
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....evelopment of industrial infrastructure. Pursuant thereto, a further notification was issued on 8-7-1999 granting new industrial units which would commence commercial production on or after 24-12-1997 and to the category of industrial units those would increase substantially their installed capacity after that date and cleared goods from the units located in the group centre and integrated infrastructure centres. There is no dispute that the said notifications No. 32/99-C.E. and No. 33/99-C.E., dated 8-7-1999 were issued in exercise of the powers conferred by sub-section (1) of Section 5A of the [Central] Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 by exempting the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act. By the notification under No. 33/1999-C.E., dated 8-7-1999, some amendments in the Notification No. 32/99-C.E., dated 8-7-1999 has been made. 'Pan masala' was excluded from exemption. 2. Briefly stated, by the said policy, whic....
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....rds, figures and brackets 'the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986)', the words, figures and brackets 'the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986) other than the goods falling under Chapter 24 or Heading No. 21.06 of the said First Schedule or the Second Schedule, as the case may be' shall be substituted." 4. The purport of the said notification dated 31-12-1999 was obvious that the exemption of the central excise as accorded was withdrawn in respect of goods falling under Chapter 24 or Heading No. 21.06 of the First Schedule or the Second Schedule respectively. Those (under Chapter 24 of the First Schedule) include Tobacco substitutes, cigarettes, chewing tobacco, etc., and under Heading No. 21.06 of the Second Schedule, pan masala. Thereafter, by the Notification No. 1/2000-C.E., dated 17-1-2000, the further amendment in the notification dated 8-7-1999 was carried out in the following manner : "In the said notification, in the opening paragraph, the words, figures and letters 'other than the goods falling under Chapter 24 or H....
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.... date Amendment (1) (2) (3) 4 32/99-Central Excise, dated the 8th July, 1999 In the said notification, in the first paragraph, for the words, figures and brackets 'the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986)', other than cigarettes falling under Chapter 24 of the First Schedule' the words, figures and brackets 'the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986) other than goods falling under Chapter 24 of the said Schedules' shall be substituted. 5 33/99-Central Excise, dated the 8th July, 1999 In the said notification, in the first paragraph, in item (a), for the words, figures and brackets 'specified in the Schedule appended to this notification other than cigarettes falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (1 of 1986)' the words, figures and brackets `specified in the Schedule appended to this notification other than goods falling under Chapter 24 of the First Schedule or the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)' shall be substituted. 6. The effect of t....
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.... be maintained or continued in any court, tribunal or other authority for any action taken or anything one or omitted to be done, in respect of any goods under the said notifications, and no enforcement shall be made by any court, tribunal or other authority of any decree or order relating to such action taken or anything done or omitted to be done as if the amendments made by sub-section (1) had been in force at all material times. (4) Recovery shall be made of all amounts of duty or interest or other charges which have not been collected or, as the case may be, which have been refunded but which would have been collected or, as the case may be, which would have not been refunded if the provisions of this Section had been in force at all material times, within a period of thirty days from the day on which the Finance Bill, 2003 receives the assent of the President, and in the event of non-payment of duty or interest or other charges so recoverable, interest at the rate of fifteen percent, per annum shall be payable from the date immediately after the expiry of the said period of thirty days till the date of payment. Explanation. - For the removal of doubts, it is hereby dec....
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....nded to the affected units, have also been issued. 3. In this regard, Finance Minister at the consideration stage of the Finance Bill had made the following statement in the Parliament : 'No industry other than tobacco in the North-East region or Assam is affected by it. What you are now asking about tobacco is to make an exception for chewing tobacco and gutkha. I will consider it fully. I will try and find a suitable legal answer for this purpose.' 4. The matter has been examined by the Board and in view of the assurance given by the Hon'ble FM, it has been decided to keep all such show cause notices, issued in respect of Chewing Tobacco and Gutkha, pending till a final decision is taken in this regard. In case Adjudication orders for recovery in this regard have been issued, the actual recovery of such amounts may also be kept pending till further orders. Accordingly, you are directed to keep all such show cause notices pending till further orders on the matter. It is however, clarified that show cause notices as necessary may continued to be issued, so that statutory bar on limitation is not attracted. 5. Receipt of this letter may please be acknowledged. (G....
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....cise duty, special excise duty and additional excise duty, payable, but for the exemption in this notification, and the sum of basic excise duty, special excise duty and additional excise duty, paid, shall be utilised by the manufacturer only for investment in plant and machinery in a manufacturing unit which is located in the State of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland or Tripura; (C) the investment in terms of condition (B), shall be made before the expiry of six months from the end of each quarter; (D) the manufacturer shall provide all details relating to the investment made in terms of condition (B), within one month after the expiry of the period of six months referred to in condition (C), to a Committee consisting of, the Chief Commissioner of Central Excise, Shillong, the Principal Secretary of the Department of Industry of the State concerned in which the investment is made, and shall have to prove to the satisfaction of the said Committee that the investment has been made for the purpose specified in condition (B); (E) if the Committee referred to in condition (D) is satisfied that the investment as specified in condition (B)....
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....d or Tripura; (ii) had commenced commercial production on or after the 24th day of December, 1997, but not later than the 28th day of February, 2001; (iii) had availed of the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated the 8th July, 1999] or No. 33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated the 8th July, 1999]; and (iv) has continued its manufacturing activities after the 28th day of February, 2001; (B) an amount equal to the sum of basic excise duty, special excise duty, additional excise duty and National Calamity Contingent duty, payable, but for the exemption in this notification, shall be utilised by the manufacturer only for investment in - (i) plant and machinery in a manufacturing unit which is located in the State of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland or Tripura; or (ii) infrastructure of civil works or social projects in the State of Arunachal Pradesh, Assam, Man....
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....uty which is equal to the amount so withdrawn and not so reinvested shall be paid by the manufacturer on the date on which the investment is withdrawn. By the Notification No. 28/2004-C.E., dated 9-7-2004 certain amendments had been made in the notification dated 21-1-2004 particularly in the conditions (C), (D) and (E). Those conditions after modification as intended, have been substituted with additional clause namely, Clause E(a). "(C) the investment in terms of condition (B), shall be made in the following manner : (i) an amount equal to the sum of basic excise duty, special excise duty, additional excise duty and National Calamity Contingent duty, payable in a quarter, but for the exemption under this notification, shall be deposited by the manufacturer, within sixty days from the end of the quarter, in an escrow account opened by the manufacturer, for this purpose, in a bank authorized for excise duty collection; (ii) operations including withdrawal from and closure of the said escrow account shall be made with the prior approval of the jurisdictional Commissioner of Central Excise, taking into account the conditio....
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....nd discharged to the extent of investments so certified; (EA) if the manufacturer fails to make the deposit or does not invest the amount specified in condition (B), within the stipulated period and in the manner, then, the duty which is equivalent to the amount not so deposited or invested shall be recoverable from the manufacturer along with interest thereon at the rate specified under Section 11AB of the Central Excise Act, 1944, and without prejudice to any action that may be taken under the provisions of the said Act or any other law for the time being in force, by forfeiture of amount in the said escrow account." 11. Not only the procedural stringency, but also imposition of interest at the rate specified under Section 11AB of the Central Excise Act, 1944, that to, without prejudice to any further action that may be taken under the provisions of the said Act has been brought in the domain of the scheme. 12. North-East Industrial Policy (NEIP), 1997 announced on 24-12-1997 has been declared to have discontinued from 1-4-2007 by the office memorandum under No. 10(3)/2007-DBA-II/NER, dated 1-4-2007. In its place, a fresh package of fiscal incentives and other c....
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....of section 5A of the Central Excise Act, 1944 (1 of 1994), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), and sub-section (3) of section 136 of the Finance Act, 2001 (14 of 2001), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2004-Central Excise, dated 21st January, 2004 which was published in the Gazette of India, Extraordinary, vide number G.S.R. 60(E) of the same date, namely :- In the said notification, after paragraph 1, the following paragraph shall be inserted, namely :- '2. The exemption contained in this notification shall not be available to goods cleared on or after the 1st day of March, 2007 : Provided that for the goods cleared on or before 28th February, 2007 in respect of which the exemption has already been availed of the conditions specified in this notification shall continue to apply.' [F. No. 334/1/2007-TRU] (S. Bajaj) Under Secretary to the Government of India &....
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....had commenced commercial production on or after 24-12-1997 but not later than 28-2-2001. The further condition that has been laid down in the notification dated 25-8-2003 is that the unit had continued its manufacturing activities after 28-2-2001. This notification is not under challenge rather the petitioners seek to avail the benefits flowing from that notification as modified from time to time. As regards, the exemption through reinvestment and its mode as prescribed by the respondents are also not under challenge by the petitioners. In the words of Dr. Saraf, learned senior counsel, in the present case, the petitioner had not claimed exemption from payment of excise duty for a period prior to 14th May, 2003 (the date on which Finance Act, 2003 was enacted). In fact the benefit of exemption which was taken away from Smoking Tobacco Products and Chewing Tobacco Products by Section 154 of the Finance Act, 2003, was again restored (partially 50%) only to the Chewing Tobacco Products vide Notification No. 69/2003-C.E., dated 25-8-2003 with a condition to invest the entire amount so exempted into Plant & Machineries in the prescribed North-Eastern States for a total period of 10 year....
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....at by the office memorandum dated 1-4-2007, Annexure-K to the writ petition, it has been clearly reassured that the new industrial policy and other concessions in the North-Eastern region, announced by the office memorandum No. EA/1/2/96-IPD, dated 24-12-1997 (NEIP, 1997) will cease to operate w.e.f. 1-4-2007 but in clear terms it has been mentioned that 'industrial units which have commenced commercial production on or before 31-3-2007 will continue to get benefits/incentives under NEIP, 1997' (Para 2 of the said office memorandum dated 1-4-2007). Even in the Finance Act, 2007 exemption of the income-tax under NEIP, 1997 under Section 80(1B) and 80(1C) had not been curtailed or taken away. Thus, the impugned notification dated 1-3-2007, Annexure-L to the writ petition, which has provided that the goods cleared on or after 1-3-2007 would not be provided with the benefits of exemption in view of the amendment as incorporated by the Govt. of India in the Ministry of Finance (Department of Revenue) Notification No. 8/2004-C.E., dated 21-1-2004. Para 2, as incorporated by the notification dated 1-3-2007, has further provided that for the goods cleared on or before 28-2-2007 and in resp....
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....ts own Industrial Policy announced in 2004 and the tax concession beyond 31-3-2009. Once the Council of Ministers takes a policy decision, the implementing Department cannot issue a notification contrary to the policy decision taken by the Government. The High Court also erred in analyzing and understanding the Notification dated 18-6-2009 as if it introduced the CST concession @ 1 per cent with effect from the date of issuance of notification. As we have already clarified, it is not the introduction of a new policy but an extension of the benefits under the extended policy. It is in this context, the decision of this Court in Suprabhat Steel Limited (supra) and State of Jharkhand and Others v. Tata Communications Limited and Another - (2006) 4 SCC 57 become relevant." 17. It is not in dispute that that the petitioners are two manufacturing units at Agartala and those were set up in pursuance to that fundamental assurance provide by the Notification Nos. 32/99-C.E. and 33/99-C.E. with their subsequent modification and restitution. As such, since the petitioners is entitled to get the benefit in view of the Notification No. 69/2003-C.E., dated 25-8-2003 they shall continue to ....
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....as been categorically negatived. It is remarkable that as far back as 1880, long before the doctrine of promissory estoppel was formulated by Denning, J., in England, A Division Bench of two English Judges in the Calcutta High Court applied the doctrine of promissory estoppel and recognised a cause of action founded upon it in the Ganges Manufacturing Co. v. Surajmuli and other - (1880) ILR 5 Cal 669. The doctrine of promissory estoppel was also applied against the Government in a case subsequently decided by the Bombay High Court in Municipal Corporation of Bombay v. The Secretary of State - (1905) IIR 29 Bom. *   *   * 23. It was also contended on behalf of the Government that if the Government were held bound by every representation made by it regarding its intention, when the exporters have acted in the manner they were invited to act, the result would be that the Government would be bound by a contractual obligation even though no formal contract in the manner required by Article 299 was executed. But this contention was negatived and it was pointed out by this Court that the respondents 'are not seeking to enforce any contractual right : t....
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....y and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of "honesty and good faith"? Why should the Government not be held to a high "standard of rectangular rectitude while dealing with its citizens? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations, but let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Indo-Afghan Agencies case [AIR 1968 SC 718] and the supremacy of the rule of law was established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of....
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....annot, as Shah, J., pointed out in the Indo-Afghan Agencies case, claim to be exempt from the liability to carry out the promise Ion some indefinite and undisclosed ground of necessity or expediency', nor can the Government claim to be the sole judge of its liability and repudiate it 'on an ex parte appraisement of the circumstances'. If the Government wants to resist the liability, it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether these facts and circumstances are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability: the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the Court is satisfied, on proper and adequate material placed by the Government, the over-riding public interest requires that the Government should not be hel....
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....judgment of this Court in Bakul Cashew Co. v. Sales Tax Officer, Quilon - (1986) 159 ITR 565 (SC). In Bakul Company's (supra) case this Court found that there was no clear material to show any definite or certain promise had been made by the Minister to the concerned persons and there was no clear material also in support of the stand that the parties had altered their position by acting upon the representations and suffered any prejudice. On facts, therefore, no case for raising the plea of estoppel has been made out. This Court proceeded on the footing that the notification granting exemption retrospectively was not in accordance with Section 10 of the State Sales Tax Act as it then stood, as there was no power to grant exemption retrospectively. By an amendment that power has been subsequently conferred. In these appeals there is no question of retrospective exemption. We also find that no reference was made by the High Court to the decision in M.P. Sugar Mills' case (supra). In our view, to the facts of the present case, the ratio of M.P. Sugar Mills' case directly applies and the plea of estoppel is unanswerable." 20. Dr. Saraf, learned senior counsel has quite candidly ....
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....any such misuse was being made or undue advantage taken of the said concessions by the newly established industries. The Government had, therefore, failed to establish the requisite ground or the basis of which it might be allowed to go back on its promise. The first submission of the learned Counsel for the appellants must, therefore, fail." 21. Having referred to Assistant Commissioner of Commercial Taxes (Asst.), Dharwar and Ors. v. Dharmendra Trading Company and Ors., Dr. Saraf, learned senior counsel has submitted that there is no averment in the counter-affidavit to show that any misuse was made of the concessions or undue advantage had been taken by the petitioners. Therefore, the Govt. cannot be permitted to resile from the promise. 22. Having referred to another decision of the Apex Court in State of Bihar and Ors. v. M/s. Suprabhat Steel Limited & Ors. reported in (1999) 1 SCC 31, Dr. Saraf, learned senior counsel has submitted that it would not be permissible for the State to deny any benefit which is otherwise available to an industrial unit under the Incentive Policy itself. In Para 7 of State of Bihar and Ors. v. M/s. Suprabhat Steel Limited & Ors., the Ap....
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..... A tax is a payment for raising general revenue. It is a burden. It is based on the principle of ability or capacity to pay. It is a manifestation of the taxing power of the State. An exemption from payment of tax under an enactment is an exemption from the tax liability. Therefore, every such exemption notification has to be read strictly. However, when an assessee is promised with a tax exemption for setting up an industry in the backward area as a term of the industrial policy, we have to read the implementing notifications in the context of the Industrial Policy. In such a case, the exemption notifications have to be read liberally keeping in mind the objects envisaged by the Industrial Policy and not in a strict sense as in the case of exemptions from tax liability under the taxing statute." 24. In U.P. Power Corporation Ltd. and Anr. v. Sant Steels and Alloys (P) Ltd. and Ors. reported in (2008) 2 SCC 777, the Apex Court on distinguishing the principle laid down in STO v. Shree Durga Oil Mills reported in (1998) 1 SCC 572 = 1998 (97) E.L.T. 202 (S.C.) has streamlined the edges further so far the concept and the operation of promissory estoppel are concerned holding tha....
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....ked at any time. Therefore, a distinction has to be made between the delegated legislation and the primary legislation. So far as the primary legislation is concerned, if the Act is passed by State Legislature and denies the benefit by the primary legislation then no estoppel can be applied against that Act but so far as the case of delegated legislation is concerned, where delegated authorities passes certain notification in exercise of his delegated authority there is no contemplation mentioned in the act itself that it is capable of being revoked at any time. Then such acts cannot be treated at par with the primary Act passed by the State Legislature. The State is fully competent to pass an Act prospectively as well as retrospectively but retrospectivity to the extent of aforesaid nature cannot stand. Therefore, this distinction has to be borne in mind. 30. In the present case, the U.P. Electricity Reforms Act, 1999 came into force with effect from 2000. Therefore, if such benefit has not been extended then a different stand will follow but so far as the delegated legislation is concerned, this kind of revocation cannot be sustained. It is highly against the public moralit....
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....st. Since the benefit was given to these units in the hill areas, there should have been overwhelming evidence to show some mala fide on the part of these consumers which have persuaded the Corporation to revoke it. If there was no misuse of the energy by these units in the hill areas to whom the concession had been granted then in that case it cannot be taken that there was really public interest involved which persuaded the Corporation to revoke the same. 32. No person can be permitted to misuse the concession or benefit and invoke promissory estoppel. Promissory estoppel is not one sided affair, it is rather two sided affair. If one party abuses the concession then it is always open to the other party to revoke such concession but if one party avails the benefit and is acting on the same representation made by the other party then the other party who has granted the said benefit cannot revoke the same under the garb of public interest. Therefore the grounds that the revocation notification was issued in public interest and that same has the flavour of the statute, cannot persuade us to uphold it sustained. 33. It is true that a detailed statement was given in various....
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....ree Sanyeeji Ispat Pvt. Ltd. and Anr. v. State of Assam and Ors., reported in (2006) 3 GLR 870 and Sunrise Biscuits Co. Ltd. and Anr. v. State of Assam and Ors., reported in (2006) 148 STC 587 (Gauhati) for further streamlining his submission. From reading of those reports the common enunciation that emerges can be found in the passage as reproduced hereunder : "The true meaning and scope of the doctrine of promissory estoppel, in the realm of governmental promises and application of this doctrine to the facts of the present case, may be summarised thus : Where the Government makes a promise knowing or intending that it would be acted upon by the promisee and, in fact, the promisee, acting upon the promise, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding the fact that there was no consideration for the promise and the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution or in accordance with the procedure prescribed by the relevant statute. The doctrine of promissory estoppel would be attracted in su....
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....eme of governance of the Government does not permit the Government to work in violation of the principles of collective responsibility. It will, therefore, be no defence for the Finance Department, in a case of the present nature, to merely contend that until the time requisite notification, in terms of the relevant statute, is published, the promise for tax exemption made by the Government under its industrial policy cannot force the Government to grant such exemption, for, there is no estoppel against the statute. In a case of this nature, if the promise made by the Government is not barred by law, though the same might not have been made strictly in accordance with the relevant statute, yet it will be the duty of the court to trace out the source of power of the Government and if the power is found to exist with the Government, the Government cannot be allowed to resile from its promise by merely citing lack of issuance of appropriate notification(s) in terms of the relevant statute. Since the doctrine of promissory estoppel can be used not merely as a shield but also as a sword and for forming cause of action, it would be permissible for the court to insist upon the Government ....
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....m the State Government, in terms of Industrial Policy, 1995. 5. Accordingly, Company submitted an application to the State Government on 21-11-1997 for grant of Sales Tax exemption under the Industrial Policy, 1995 for a period of 5 years w.e.f. 1-1-1998. Thereafter, the matter remained pending for consideration by the State Government and the Financial Institutions. There were a series of joint meetings of the Government, Financial Institutions and the Company, over the next three years. In all these meetings, as well as correspondence categoric assurances were given that the necessary Sales Tax exemption notification would be issued shortly. However, no such notification was issued causing great hardship to the Company. It was, therefore, constrained to file writ petition (CWJC No. 6838 of 2000) in the High Court at Patna. In this writ petition, the prayer was for issuance of the writ in the nature of mandamus directing the State of Bihar to issue necessary Notification under Clause 24 of the 1995 Policy. The claim of the Company was that Notification under Clause 24 of the Industrial Policy, 1995 ought to have been issued within one month of the release/publication of the ....
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.... of the Industrial Policy, 1995." 27. While closing the submission, Dr. Saraf, learned senior counsel appearing for the petitioners has submitted that the petitioner No. 1 commenced the commercial production on 8-8-2000 and the petitioner No. 2 commenced the commercial production on 24-12-1997 and as such, in terms of the Notification No. 69/2003-C.E., dated 25-8-2003 read with Notification Nos. 32/99-C.E. and 33/99-C.E., dated 8-7-1999 the petitioners are entitled to have the benefits irrespective of the lapse in issuing the notification in terms of the NEIP, 1997. 28. It is to be noted that by the order dated 5-4-2010 delivered in C.M. Application No. 119/2010, arising from this writ petition, the following direction or interim prohibitory order was passed : "This Court has gone through he order dated 9-3-2000 passed by the Co-ordinate Bench at the Principal Seat in WP (C) 750/2010. It appears from the said order that this Court has passed an order, inter alia, the documents annexed and the rival pleas have generated contentious issues demanding a more extensive and in-depth scrutiny thereof for effective and complete adjudication of the same. In the said order it is....
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....the Central Excise Rules, 1944, in force immediately and shall continue to have the same force and effect after commencement until it is amended under the provision of this section. Under Section 5A(4) of the Central Excise Act, 1944, force and effect of the Notification shall be continued until it is 'amended'. So, provision for amendment of Notification is also there within the provision of Section 5A under CEX Act, 1944 if the Central Govt. is satisfied that it is necessary in the public interest to do so. Subject to this nothing stated by the petitioners is admitted. Amendment has been made considering the Govt. Policy, public interest and all relevant considerations. 15. That with reference to Para 46 of the writ petition, I humbly submit that the withdrawal of any benefit of exemption granted earlier by issuing respective Notification is also within the provision of section 8 under C EX Act, 1944, so that overall public interest of the country as a whole is ensured, subject to which nothing stated by the petitioners is admitted. 16. That the averments in Para 47 of the writ petition that as per section 38A(c) of the Central Excise Act, 1944, right, privilege accru....
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..... both dated 8-7-1999. In this regard, it may be noted that Heading No. 21.06 relates to pan masala and Chapter 24 relates to pan masala containing tobacco. They have also admitted that by the Notification No. 1/2000, dated 17-1-2000 the notifications dated 8-7-1999 were restored to the extent of the goods falling under Chapter 24 or Heading No. 21.06 of the First Schedule and the Second Schedule respectively of the Central Excise Tariff Act by making necessary amendments. They have asserted that the Central Govt. in exercise of powers conferred by or under sub-section (1) of Section 5A of Central Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) withdrew the exemption on cigarettes falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 by making necessary amendments in the notifications dated 8-7-1999 and 22-1-2001. They have further asserted that the exemption as provided to the goods falling under Chapter 24 of the First Schedule or under the Second Schedule of the Central Excise Tariff Act, 1985 as stated was withdrawn by the Notification No. 6/2001-C.E.,....
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....e duties thereby granting 100% exemption under certain conditions that they have to invest in (i) plant and machinery and (ii) infrastructure or civil work or social project retaining other conditions in the Notification No. 69/2003-C.E., dated 25-8-2003. Those respondents have categorically admitted that in pursuance to the notifications dated 25-8-2003 and 21-1-2004 the petitioners are entitled to retain the excise duty and invest at their own volition in the project undertaken by them, subject to verification by the Investment Appraisal Committee (IAC) on whose certification the said exemption can be availed. By another Notification under No. 28/2004, dated 9-7-2004, as stated earlier, it has been provided that the exemptible duty is to be maintained in an escrow account subject to the conditions as laid down in the Notification No. 8/2004, dated 21-1-2004. Those respondents have asserted that : ".....The Notification No. 11/07-C.E., dated 1-3-2007 has been issued in public interest as there is misuse of the operation of the escrow mechanism by the beneficiary unit investment claimed to have been made in the project by the writ petitioner could not be termed as social project i....
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....rore. It was the responsibility of the petitioner to voluntarily deposit the unutilised amount to the Government exchequer, immediately and by not depositing the said amount the petitioner acted upon illegally and taken the responsibility in his shoulder for consequences by not investing the amount in the manner specified in the notification. The petitioner has resorted to litigation causing inordinate delay in recovering the Government money. Recovery of such huge money locked in litigation is/was grave concern to the department and also to the respondent being jurisdictional Commissioner responsible for the safeguard of the Government revenue." 32. Subsequently by the Notification No. 21/2007-C.E., dated 25-4-2007 pan masala and other goods have been deleted from the Chapters 21 and 24 of the First Schedule of the Central Excise Tariff Act, 1985. According to those respondents, all relevant factors including the public interest and the adverse effect of consumption of tobacco and tobacco products were taken care of, while issuing the notification dated 1-3-2007. 33. By filing an additional affidavit on 7-4-2015, those respondents have raised another plea of estoppel b....
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.... the incentives by way of exemption from payment of excise duty was rescinded vis-à-vis goods falling under Chapter 24. The combined effect thus in view of this statutory precept was that whereas cigarettes falling under Chapter 24 and pan masala containing tobacco falling under sub-heading 2106.00 and 2404.49 of the First Schedule or the Second Schedule to the Tariff Act, 1985 were denied the exemption from payment of excise duty w.e.f. 8-7-1999, all goods falling under Chapter 24 were dislodged from the benefit of exemption on and from 1-3-2001. This progression of events teed off (sic) by the notification dated 31-12-99 and culminating with the introduction of Section 154 by the Finance Act, 2003, by no means can be disregarded vis-à-vis the Policy, 1997 which otherwise was then in force. That the validity of Section 154 of the Finance Act, 2003 had been upheld by the Apex Court negating a challenge to the vires thereof by the manufacturer of cigarettes falling under Chapter 24 of the Tariff Act, 1985, permitting recovery of the arrear duty is an unassailably admitted fact. This verdict which holds the sway as on date, not only did uphold the constitutional validit....
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.... view of Section 154 of the Finance Act, 2003 along with Schedule 9 thereto thus commends for acceptance. The benefit of partial exemption from payment of excise duty vis-à-vis some of the goods under Chapter 24 of the Tariff Act, 1985, as indicated in the said notification thus cannot be construed to be under the Policy, 1997 as insisted upon by the Petitioner. The notification No. 8/2004-C.E., dated 21-1-2004 appearing in the scene thereafter exempted all goods falling under sub-heading 2401.90, 2402.00, 2404.41, 2404.49, 2404.50 or 2404.99 of the First Schedule and Second Schedule to the Tariff Act, 1985 from whole of the duties of excise, additional duties of excise leviable under the Tariff Act, 1985, etc., as mentioned therein. The benefit again was limited to the identified manufacturing units that that had commenced commercial production on or after 24-12-1997 but not later than 28-2-2001 and had continued its manufacturing activities thereafter. Thereby the exempted amount of duty was to be invested in the plants and machineries and for other works as referred to therein. The Notification No. 28/2004-C.E., dated 9-7-2004 introduced further amendments in the one date....
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....7 and the industrial units, which had commenced commercial production on and from 31-3-2007, would continue to receive the benefits/incentives under the earlier Policy. While reserving to the Government the right to modify any part of the Policy in public interest all concerned Ministries/Departments of the Government of India were requested to amend their respective Acts/rules/notifications etc. and to issue necessary instructions for giving effect to the decisions engrafted in the Policy, 2007. The office memorandum No. 10(3)/2007-DBA-II/NER, dated 1-4-2007 also of the same Ministry in substance reiterated the cessation of the effect of the Policy, 1997 on and from 1-4-2007 with the rider that the industrial units which have commenced commercial production on or before 31-3-2007 would continue to receive the benefits/incentives thereunder. Much emphasis has been laid by the petitioner on Clause (2) of the Policy, 2007 to impress upon this Court that having regard to the date(s) of commencement of commercial production by its manufacturing units qua the goods involved, it was entitled to be endowed with the benefits/incentives as available under Policy, 1997, the negative list not....
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....red the continuance of the benefits/incentives of exemption from payment of excise duty as promised by the Policy, 1997. As a matter of fact, all its formulations qua the various legal principles highlighted stem from such a notion. If the interpretation of Clause (2) of the Policy, 2007 as intended by the petitioner is accepted, the negative list for all intents and purposes would be rendered redundant and otiose. Further it would signify effacement of the march of events prior thereto ending with Section 154 of Finance Act, 2003, the vires whereof has been upheld by the Apex Court in R.C. Tobacco, supra. 71. The Apex Court in Novopan India Ltd., Hyderabad v. Collector of Central Excise and Customs, Hyderabad and Tata Iron and Steel Co. Ltd. (supra), negated the plea that the benefit of an ambiguity in the language in an exemption notification ought to be construed in favour of the assessee. By recalling its earlier decision in CCE v. Parle Exports (P) Ltd. : (1989) 1 SCC 345, it was held that the principle that in case of ambiguity, the taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exemption provision,....
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....w. It is only its palpably arbitrary exercises which can be declared void.... The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide. 72. In the above view of the matter, on a totality of the aforementioned considerations, the challenge to the notifications dated 1-3-2007 and 25-4-2007 based on Policy, 1997 cannot be sustained. A contrary intention being apparent from Section 154 of the Finance Act, 2003 read with Schedule 9 thereto as well as the notifications issued after the Policy, 1997 curtailing/regulating from time to time the exemptions from payment of excise duty as contemplated by the said Policy, I am of the unhesitant opinion that the petitioner too is not entitled to any protection under Section 38A of the Act. The decisions relied upon by it qua promissory estoppel and legitimate expectation are thus of no avail to it in this perspective. There is no discernible conflict in the approach of the respondent authorities in promu....
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.... promissory estoppel by restraining premature withdrawal of the benefits? (ii) Whether the Notification No. 69/2003-C.E., dated 25-8-2003, Annexure-H to the writ petition has been completely eclipsed by the Notification No. 8/2004-C.E., dated 21-1-2004, Annexure-I to the writ petition? And (iii) Whether there is any misuse of process or public interest element justifying the withdrawal of benefits as granted by the NEIP, 1997 by virtue of the notification dated 1-3-2007, Annexure-L to the writ petition? 37. There cannot be any amount of dispute that by the Notification No. 69/2003-C.E., dated 25-8-2003 the Central Government had reintroduced in the public interest exemption of excisible goods of the description specified in the Column 3 of the table appended below the said notification and falling within the sub-heading mentioned therein of the First Schedule to the Central Excise Tariff Act, 1985 subject to the conditions as stated. There is no challenge by the petitioner against the said notification. Even Dr. Saraf, learned Senior Counsel appearing for the petitioner has clearly stated that the petitioners are not claiming any benefit which ....
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....y questionable but they have not denied that both the units of the petitioners availed the incentive. If incentives were not availed, but they are covered by the notifications dated 25-8-2003 and 21-1-2004 conjointly, they are entitled to get such incentives in the form of exemption subject to their compliance of the conditions as laid down therein, till withdrawal or expiry of the promised period. 39. G. Spencer Bower in his celebrated treatise, The Law Relating to Estoppel by Representation (London: Butterworths, 2004, 4th ed., Para 1.2.2) has observed that : "......where one person ("the representor") has made a representation of fact to another person ("the representee") in words or by acts or conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive) and with the result of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at var....
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....ners have given into the restructured promise and now they have approached this court to enforce their right which according to them is poised against the notification dated 1-3-2007, whereby an inequitable act has been resorted to by the respondents. In this regard, the ratio as laid down in Sales Tax Officer and Anr. v. Shree Durga Oil Mills and Anr., reported in (1998) 1 SCC 572 = 1998 (97) E.L.T. 202 (S.C.) and Kasinka Trading v. Union of India and Anr., reported in (1995) 1 SCC 274 = 1994 (74) E.L.T. 782 (S.C.) is based on the factual aspect that there was no unequivocal representation in respect of exemption and for withdrawal of such promise it would not be necessary for the Government to establish an overriding equity in its favour. In UP Power Corporation Ltd. and Anr. v. Sant Steels and Alloys (P) Ltd. and Ors., the Apex Court has clearly distinguished the ratio on unequivocal representation. In this case, even the respondents have not advanced the plea of absence of unequivocal representation. It is well settled that if the statutory authority or an executing authority of the State, functioning on its behalf, in exercise of its legally permissible powers had held out any....
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....it is an evolving doctrine, the contours of which are not yet fully and finally demarcated. It would be instructive to bear in mind what Viscount Hailsham said in Woodhouse Ltd. v. Nigerian Produce Ltd., (1972) A.C. 741 : I desire to add that the time may soon come when the whole sequence of cases based upon promissory estoppel since the war, beginning with Central London Property Trust Ltd. v. High Trees House Ltd., (1947) 1 K.B. 130 may need to be reviewed and reduced to a coherent body of doctrine by the courts. I do not mean to say that they are to be regarded with suspicion. But as is common with an expanding doctrine, they do raise problems of coherent exposition which have never been systematically explored. "55. Though the above view was expressed as far back as 1972, it is no less valid today. The dissonance in the views expressed by this Court in some of its decisions on the subject emphasises such a need. The views expounded in Motilal Padampat Sugar Mills Company Limited v. State of Uttar Pradesh, (1979) 42 SCC 409 : AIR 1979 SC 621), was departed from in certain respects in Jit Ram Shiv Kumar v. State of Haryana : (1981) 1 SCC 11 : AIR 1980 SC 1285, which was in....
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....ties and deciding whether in the interests of justice and equity the promissor can be allowed to resile from his promise and compensate the promise appropriately or the promissor ought to be held to his promise and not allowed to go back since such a course is necessary in view of the change in position of promise? Our view of the matter is probably evident from the way we have posed the above questions. To wit, the rule of promissory estoppel being an equitable doctrine, has to be moulded to suit the particular situation it is not a hard and fast rule but an elastic one, the objective of which is to do justice between the parties and to extend an equitable treatment to them. If it is more just from the point of view of both promissor and promise that the latter is compensated appropriately and allow the promissor to go back on his promise, that should be done; but if the Court is of the opinion that the interests of justice and equity demand that the promissor should not be allowed to resile from his representation in the facts and circumstances of that case, it will do so. This, in our respectful opinion, is the proper way of understanding the words "promise altering his position....
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.... in (2005) 1 SCC 625, the Apex Court has again restated the law after making reference to development of doctrine of promissory estoppel in India holding that even the beneficiaries are not entitled to opportunity of hearing before prematurely withdrawing the incentives. But the State must provide reason that such withdrawal is backed by supervening public interest and the action satisfied the test of fairness and reasonableness. In such case, harshness of the action can be no ground to challenge the premature withdrawal of incentives. In Mahabir Vegetable Oils (P) Ltd. and Another v. State of Haryana and Others reported in (2006) 3 SCC 620, the Apex Court has dispelled the confusion as to the legislative intervention in the promise holding that : "22. It is not in dispute that when the appellants herein started making investments, Rule 28A was operative. Representation indisputably was made in terms of the said Rules. The State, as noticed hereinbefore, made a long-term industrial policy. From time to time it makes changes in the policy keeping in view the situational change. 23. The State intended inter alia to grant incentive to include industrial units by way of wai....
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.... of production. If in response to such an order and in consideration of the concession made available, promoters of any small scale concern have set up their industries within the State of Kerala, they would certainly be entitled to plead the rule of estoppel in their favour when the State of Kerala purports to act differently. Several decisions of this Court were cited in support of the stand of the appellants that in similar circumstances the plea of estoppel can be and has been applied and the leading authority on this point is the case of M.P. Sugar Mills. On the other hand, reliance has been placed on behalf of the State on a judgment of this Court in Bakul Cashew Co. v. STO. In Bakul Cashew Co. case this Court found that there was no clear material to show any definite or certain promise had been made by the Minister to the concerned persons and there was no clear material also in support of the stand that the parties had altered their position by acting upon the representations and suffered any prejudice. On facts, therefore, no case for raising the plea of estoppel was held to have been made out. This Court proceeded on the footing that the notification granting exemption r....
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....nd Another, but a close reading would show that the element of public interest is the ultimate determinant. Even the court may make a comparative assessment of reasons and strike a balance thereof. In this case one important aspect as canvassed by the respondents requires relook. In Para 27(xiv) the respondents has stated as under : "That, subsequently the Govt. of India, Ministry of Finance, Department of Revenue issued another Notification bearing No. 21/2007-C.E., dated 25-4-2007 under Section 5A of the Central Excise Act, 1944 amending Notification No. 32/99-C.E., dated 8-7-99 and Notification No. 33/99-C.E., dated 8-7-99 in public interest deleting pan masala falling under Chapter 21 of the said First Schedule and goods falling under Chapter 24 of the said First Schedule of the Central Excise Tariff Act, 1985 from the purview of the exemption notification which is also challenged by the writ petitioner on the ground of promissory estoppel." 44. According to the respondents, the said notification dated 25-4-2007 Annexure-M to the counter-affidavit has been issued solely on consideration of safeguarding public interest having regard to the health hazards relating to consu....
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....ave commenced commercial production on or before 31-12-2007 will continue to get benefits/incentives under NEIP, 1997 in terms of the Notification No. 8/2004-C.E., dated 21-1-2004 subject to the notification dated 25-4-2007. For deposit, the petitioner would get relaxation for purpose of counting limitation in terms of Notification 28/2004-C.E., dated 9-1-2004. The limitation would start from this day for compliance of the modality as laid down in the Notification Nos. 8/2004-C.E., dated 21-1-2004 and 28/2004-C.E., dated 9-7-2004. This court, however, has not made any observation consciously as to the petitioners' entitlement under the scheme. The competent authority would decide the same. 45. The other point though has been substantially dealt with in the preceding part but according to this court it requires a specific response. As raised by the respondents that the Notification No. 69/2003-C.E., dated 25-8-2003 has been superseded by the Notification No. 8/2004-C.E., dated 21-1-2004, no relief in terms of the said notification dated 25-8-2003 can be granted to the petitioner. On a comparative study of those notifications, this court finds that the notification dated 25-8-2....