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2010 (12) TMI 237 - HC - Central ExciseTax free zone - Exemption of units located in J&K - Modification in exemption scheme – Held that: - The industrial units were so established on the promise extended to them by the Government to provide the incentive of 100% exemption from payment of excise duty on finished goods and in lieu of this, the petitioners have altered their position by establishing the industrial units within the specified areas in the State This incentive was provided in the nature of l00% exemption from payment of excise duty for a specified period. The amendment: made vide impugned notifications, has to be considered in the context of the original industrial policy which was formulated in terms of which incentive was provided for inviting the entrepreneurs to make investment in the State in specified areas. - in the present case, the exemption granted by the Government was not an exemption simplicitor but an exemption granted in pursuance to a promise extended to the investors on the basis of a policy resolution and notification issued pursuant there to dt. 14th of Nov’2002. Principles of ‘promissory estoppel - , it clearly emerges that a promise was extended by the State Government to the petitioner Units by way of an incentive in the shape of 100% exemption from payment of excise duty and acting upon the said promise, the petitioners established their units within the specified areas in the State of J&K and have altered their position. Unilateral withdrawal of that promise is barred by the principle of equitable promissory estoppel. Misuse of exemption - the plea of revenue that some unscrupulous manufacturers were involved in bogus production for the purpose of claiming maximum exemption from the payment of excise duty, cannot be generalized but has to be case specific. The same, therefore, cannot be treated to be in the public interest as projected by the respondents. This is because there has been no individual identification of such bogus manufacturers and the action of respondents vide impugned notifications would prejudice the rights of those genuine manufacturers who on the promise of the State, have altered their position and are involved in fair ndustrial activities. Notification no. 19/2008 CE dated 27-3-2008 shall stand quashed. The petitioner-units shall continue to avail the benefit of exemption from payment of excise duty as provided in terms of the notification No.56/2002-CE dt. 14th of Nov’02. The respondent-State, however, shall be at liberty to take appropriate action in .accordance with the relevant rules against those unscrupulous manufacturers who are involved in illegal activities of alleged bogus production.
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