TaxTMI 
TaxTMI 
2005 (3) TMI 146
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.... competitive bid for procurement of ACSR Moose Conductors for Simhardri Vizag Transmission Systems Project. It is stated that the said project was financed by Japan Bank of International Corporation (JBIC) under loan No. ID-P127. The petitioner being a successful bidder was communicated with award of the contract and orders were placed on it by A.P. TRANSCO on 4-12-2000, 19-1-2001 and 16-3-2001 (vide Annexures P1, P2 and P3). 3. Annexure P2 is the purchase order with respect to ACSR Moose Conductors wherein the terms and conditions of the supply have been set out. The condition relating to excise duty and deemed export benefits as specified in clauses 2.1.1 and 2.2 being relevant for the purpose of enquiry in the case on hand, are extracted hereunder. "2.1.1. Excise Duty: Excise Duty is not payable by A.P. TRANSCO. However this is reimbursable by Government of India as supplementary cash assistance and you should claim the cash assistance directly from Government of India. 2.2. Deemed Export Benefits : You are solely responsible for obtaining any deemed export benefits which you have considered in your offer. In case of failure to receive any ....
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....er to supply the material. Be that as it may, the fact is that A.P. TRANSCO issued a certificate being Annexure P5. For the sake of convenience, the certificate is extracted hereunder. "CERTIFICATE An order has been placed by this office on M/s. Sterlite Industries (India) Ltd., Poona for supply of ACSR Moose Conductor of size : 54/7/3.53mm-1700 Km against package-A of Bid No : SVT/EHVT-3/2000 for an Ex-works value of Rs. 25,53,40,000/-. This is to certify that the said material is intended for use on 400 KV Vizag-Khammam DC Line under Simhadri and Vizag Transmission System Project financed through loan No. ID-P127 by the Japan Bank of International Co-operation Fund (JBIC, formerly OECF: Overseas Economic Cooperation Fund), Japan and is approved by the Government of India for implementation by the Govt. of Andhra Pradesh. The certificate is being issued in pursuance of the requirement under Govt. of India (Ministry of Finance, Department of Revenue) notification No. 108/95, dated 28-08-1995 amended vide Notification No. 7/98-C.E., dated 2-6-1998, No. 33/98, dated 13-10-1998 and 4/99-C.E. dated 11-2-1999 for exemption of Central Excise duty or addition....
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.... not notified as an international organisation. The grievance/complaint of the petitioner is that notice and summons had been issued to the petitioner by the Excise authorities including a summons under Section 14 of the Central Excise Act on the allegation that enquiry against the petitioner is provisions of Central Excise Act and rules made thereunder. It was contended that the respondents including the Central Excise authorities were fully aware of all facts both as regards the requirements of the Exemption Notification No. 108 of 1995 and also the exemption certificates issued by A.P. TRANSCO, and if in their view JBIC is not a notified organisation under the United Nations (Privileges and Immunities) Act, 1947, it required no detailed enquiry as was purported to be done treating the case to be one of contravention of the provisions of the Excise Act and issuing of summons. Various other contentions have also been raised assailing the impugned orders of cancellation of the exemption certificates, reference to which would be made at appropriate stage. 8. As certificates were issued purportedly under para (c)(ii) of the Exemption Notification No. 108/95 by the A.P. TRANSCO, th....
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....has been approved by the Government of India, a certificate from the executive head of the Project Implementing Authority and countersigned by an officer not below the rank of a Joint Secretary to the Government of India, in the concerned Line Ministry in the Government of India, that the said goods are required for the execution of the said project and that the said project has duly been approved by the Government of India, and (ii) if the said project has been approved by the Government of India for implementation by the Government of a State or a Union Territory, a certificate from the executive head of the Project Implementing Authority and countersigned by the Principal Secretary or the Secretary (Finance), as the case may be, in the concerned State Government or the Union Territory, that the said goods are required for the execution of the said project, and that the said project has been duly approved by the Government of India for implementation by the concerned State Government. Explanation. - For the purposes of this notification - (a)"international organization" means an international organisation to which the Central Government has declared, in....
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....sued in terms of para c(ii) would be required for availing of the exemption from payment of excise duty. For granting such a certificate, the implementing authority has to look to the conditions set out in the notification and nowhere else. What is postulated in para (c)(ii) of the Exemption Notification is a certificate in terms of the conditions prescribed in para c of the Notification. There is no warrant for assuming that the Notification envisages conditions for the issue of the certificate other than those specified by itself. There is nothing in the language of the notification to suggest that a certificate can be issued by the implementing authority either to declare an organisation as international organisation or to treat JBIC as a declared international organisation. The conditions for availing exemption in the Notification are clearly specified therein and are exhaustive. The Exemption Notification is quite clear and leaves no ambiguity or doubt as to the conditions on fulfilment of which the implementing authority is empowered to issue a certificate. In other words, the authority empowered to issue certificate cannot travel beyond the four corners of the Notifica....
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....n Notification which alone confers the eligibility to exemption in terms of para (c) of the Notification. As already held, the conditions specified in the Exemption Notification are not satisfied. 12. In the circumstances, it must be held that the certificates issued by A.P. TRANSCO were beyond its authority and ultra vires its powers. 13. As regards the action of A.P. TRANSCO cancelling the certificates as it did by the impugned letters, the contentions of the petitioners are : the doctrine of promissory estoppel is applicable to the facts of the case. There was no material to show existence of any overriding public interest to rule out the application of the said doctrine. There is no scope for retrospective withdrawal. In any event, before cancelling all the certificates, no opportunity of hearing was granted. The decision to cancel the certificates is not that of A.P. TRANSCO, but on the basis of certain intimation received from the Excise Department. The certificates issued have been acted upon even by the Excise authorities and the question is one of reimbursement of excise duty in terms of the deemed export benefits. As the excise duty now demanded is reimbursable to t....
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....in case of short-levy. 16. Estoppel, it is by now well settled, is a rule of equity. It is equally well settled by now that even though a case may not fall within the terms of Section 115 of the Indian Evidence Act, 1872, which enacts the rule of estoppel, it would still be open to a person who had acted on a representation made by the Government to claim that the Government should be bound to carry out the promise made by it. Though several precedents have been cited at the Bar, it would suffice here to refer to a recent judgment of the Supreme Court in State of Punjab v. Nestle India Ltd. relied upon by Sri Ravi, learned Counsel for the petitioner. In that case, the law on the doctrine of the promissory estoppel has been recapitulated. The principal conditions for the operation of the doctrine have been stated, viz., - (I) a clear and unequivocal promise knowing and intending that it would be acted upon by the promisee; (2) such acting upon the promise by the promisee so that it would be inequitable to allow the promisor to go back on the promise. 17. In Nestle India case (supra), Justice Ruma Pal speaking for the Division Bench of the Supreme Court listed the 'strength....
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.... equitable doctrine of promissory estoppel cannot be allowed to operate as to validate an ultra vires act or to override the clear words of the statute. We are further fortified in this view by the Division Bench judgment of this Court in M. Devanarayana Reddy v. Government of A.P.. To attract the doctrine of promissory estoppel there should be a representation made by the Government, based on which the promisee has altered his position. In the case on hand, it is the bid documents which have to be looked into as to whether they contain any such representation made to the petitioner. It is based thereupon that the petitioner offered his bid. The certificates, made the foundation, for attracting the doctrine of promissory estoppel, are those issued subsequent to the award of the contract to the petitioner. At the time, the petitioner submitted his bid offering to supply the goods to A.P. TRANSCO, there was no representation that the goods are exempt from payment of excise duty. There is no such representation contained in the bid documents. Even in the purchase orders placed upon the petitioner by A.P. TRANSCO, it was clearly stipulated in paragraphs 2.1.1 and 2.2 that excise duty i....
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....Act 46 of 1947 by reference or otherwise. No provision of the said Act 46 of 1947 has been incorporated as contended. It is only in the clause defining an international organisation that mention is made to that international organisation which has been so declared by the Central Government in pursuance of Section 3 of Act 46 of 1947. The definition clause in the Exemption Notification states that for the purpose of the notification international organisation means an organisation so declared by the Central Government in pursuance of Section 3 of Act 46 of 1947. There is nothing in the language of the said Notification which incorporates any provision of Act 46 of 1947. Neither Act 46 of 1947 or any provision thereof has been made applicable to the Exemption Notification so as to attract the principle of incorporation by reference. The clear intention of the exemption Notification cannot be defeated by resort to the provisions of Act 46 of 1947 which have not been incorporated. 21. The petitioner having failed to establish its entitlement to the exemption in terms of the Exemption Notification, cannot press into effect the doctrine of promissory estoppel against the Central Gover....
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.... case specifically covered by the Exemption Notification No.108/95 issued in pursuance of Section 5A of the Central Excise Act. 23. Significantly, Nestle India Ltd. case (supra) turned upon the competence of the promissor to make the promise that it did. It was found in that case that the Government had, by series of actions on its own part, made representations regarding the non-levy of purchase tax and that the respondents in that case had acted on the representations so made. The only question that arose for consideration in that case was as to the applicability of the principle of promissory estoppel when the relevant statute prescribes a particular mode for the grant of relief in respect of which the representation has been made. It was found that in terms of the Punjab General Sales Tax Act, 1948, being the relevant statute under consideration in that case, there was power to treat the goods otherwise leviable to tax under the Act as tax-free under Section 6(2). The State Government had the power under Section 31 to amend Schedule 'C' itself and thereby remove the goods from imposition of tax altogether. In addition, the promisor - State Government had the power to....