TMI Blog2011 (7) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... f the handbook i.e. entitled to DEPB rate as prescribed on the “date of export”. This will mean that the respondent is entitled to DEPB rate as in the policy with effect from 15th April, 1998 @ 20% applicable to the woven jackets without any value cap. - Decided in favor of assessee (exporter). - 884 of 2010 - - - Dated:- 25-7-2011 - Dipak Misra, C.J. and Sanjiv Khanna, J. REPRESENTED BY : Shri B. Niren, CGSC, for the Appellant. None, for the Respondent. [Judgment per : Sanjiv Khanna, J.]. Union of India and Director General of Foreign Trade have filed the present intra court appeal assailing the decision dated 21st May, 2010, allowing the writ petition filed by Himsheel International, the respondent herein. 2. The respondent is engaged in exports and on 19th March, 1998, had received a confirmation order for supply of 10,000 jackets to a company in USA. On 31st March, 1998, the foreign party issued an irrevocable letter of credit issued by a commercial bank in USA, in favour of the respondent. By 21 shipping bills, 10,000 jackets were exported by the respondent to the said foreign party between the period 26th March, 1998 to 5th June, 1998 as per the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014504/5-6-98 ₹ 2,54,924.01 -do- 3. There is no dispute and the factum that the respondent received payment in terms of the export order and the irrevocable letter of credit. 4. The appellant has introduced Duty Entitlement Passbook Scheme/Benefit (DEPB, for short). As per the said scheme, the exporter is eligible to claim credit of a specified percentage of FOB value of the exports made in freely convertible currency. The credit is available against such export products and at such rates as may be specified by the appellant No. 2 in the public notices. The DEPB copy or scripts can be utilised for payment of customs duty at the time of clearance of goods, except capital goods or the goods mentioned in the negative list. DEPB scripts can be also sold by the exporters in the market and utilised by the third party purchaser for payment of custom duty. Referring to the objective and purpose behind the scheme, the Supreme Court in Liberty India v. CIT, (2009) 9 SCC 328 = 2009 (241) E.L.T. 326 (S.C.), has observed : 35. DEPB is an incentive. It is given under the Duty Exemption Remission Scheme. Essentially, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for shipments at Sl. No. 2 to 21. the respondent was given DEPB credit of ₹ 40/- per jacket. 9. The respondent made representations pleading promissory estoppel and the factum that the respondent had entered into a contract and even receipt of the irrevocable letter of credit prior to 15th April, 1998 is established. It was highlighted that the new rate of DEPB with the cap value would result in reduction of DEPB rate of 23% to almost 1%. It was submitted that the contract which the respondent had entered into was keeping in mind the earlier DEPB rate and such a drastic reduction had made the entire transaction uneconomic and had put the respondent to unbearable losses. Reliance was placed on paragraph 1.5 of the Export-Import Policy and it was submitted that the transitional clause should be applied and the respondent should be given benefit. 10. The request made by the respondent was considered by the appellants but was rejected by the letters dated 23rd July, 1999 and 13th August, 1999. 11. The respondent thereafter approached the appellate authority but was informed by letter dated 23rd February, 2000 that the appeal regarding DEPB did not lay before the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant that the rate fixed shall continue when exports were made. Thus, the respondent was fully aware that the DEPB rates may undergo reduction/modification. The appellants have relied upon the handbook of procedures 1997-2002, Volume I, in which it has been stated that DEPB rates and value cap shall be applicable as on the date of export as per clause 15.15 of the Handbook of Procedures. 15. For the sake of convenience, Clause 15.15 of the Hand Book is reproduced below :- 15.15 Date of shipment/despatch for the purposes of exports will be reckoned as under :- Mode of Transportation Date of Shipment/Despatch (i) By sea (a) For bulk cargo, the date of Bill of Lading or the date of mate receipt, whichever is later. (b) For containerised cargo, the date of Onboard Bill of Lading , or Received for Shipment Bill of Lading , where the L/C provides for such Bill of Lading. For exports by containers from Inland Container Depot (ICD), the date of Bill of Lading issued by shipping agents at the time of loading of export goods in the ICD after customs clearance. (c) For Lash barges, the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of imposition of such restriction. 18. It is the stand of the appellants that paragraph 1.5 of the Exim Policy 1997-2002 is not applicable to DEPB credit as the same is determined on the prevailing rates of custom duty on the import content of the export product. The result is neutralisation , (Refer Liberty India (supra)). 19. Clause 15.15 is a general clause and fixes/prescribes the date of shipment/export. This is the general principle/rule. However, the aforesaid clause does not stipulate the effect or consequence when there is an amendment or reduction but subsequent to or after an exporter had entered into a firm contract. The question raised is whether in such cases, principle of promissory estoppel can be applied. 20. Clause 1.5 of the Exim Policy may not be strictly applicable as the same deals with export/import and imposition of restriction or regulation within original validity or issue of irrevocable letter of credit before such imposition of restriction but the said clause gives an indication and supports the principle of promissory estoppels; that the appellants do not want that the importers/exporters should suffer economic loss or hardship because of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. From the very nature of power of exemption granted to the Government under Section 25 of the Act, it follows that the same is with a view to enabling the Government to regulate, control and promote the industries and industrial production in the country. Notification No. 66 of 1979 in our opinion, was not designed or issued to induce the appellants to import PVC resin. Admittedly, the said notification was not even intended as an incentive for import. The notification on the plain language of it was conceived and issued on the Central Government being satisfied that it is necessary in the public interest so to do . Strictly speaking, therefore, the notification cannot be said to have extended any representation much less a promise to a party getting the benefit of it to enable it to invoke the doctrine of promissory estoppel against the State. It would bear repetition that in order to invoke the doctrine of promissory estoppel, it is necessary that the promise which is sought to be enforced must be shown to be an unequivocal promise to the other party intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Notification No. 66 mentioned the period during which it was to remain in force, would make any difference to the situation. In other words, could it be said that an exemption notified without specifying the period within which the exemption would remain in force, would be withdrawn in public interest but not the one in which a period has been so specified? Once public interest is accepted as the superior equity which can override individual equity, the principle should be applicable even in cases where a period has been indicated. The Government is competent to resile from a promise even if there is no manifest public interest involved, provided, of course, no one is put in any adverse situation which cannot be rectified. To adopt the line of reasoning in Emmanuel Ayodeji Ajayi v. Briscoe quoted in M.P. Sugar Mills even where there is no such overriding public interest, it may still be within the competence of the Government to resile from the promise on giving reasonable notice which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position, provided, of course, it is possible for the promisee to restore the status quo ante. If, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to show that the concession or benefit has been withdrawn in a public interest and evidence and material must be brought on record to establish the plea of larger public interest by the Government/authority. 28. In the present case, the appellant has not pleaded that why the difference in the DEPB rate was made and what prompted the huge and substantial reduction from 23% to bare 1%, in case the cap value of ₹ 200/- is taken into consideration. The appellants have not endeavoured to justify or explain why this was necessary and required. In the counter affidavit, it is pleaded as under :- The petitioners reportedly were given DEPB credit on one shipping bill of 26-3-1998 @ 23% vide DEPB licence No. 0127753 dated 18-2-1999. They were also given DEPB credit @ 20% with a value cap of ₹ 200/- i.e. ₹ 40/- per piece for their shipment dated 15-4-1998 which included six shipping bills. They were also given DEPB credit @ 20% with a value cap of ₹ 200/- i.e. ₹ 40/- per peiece for their shipment from 14-5-1998 to 26-5-1998 which included 5 shipping bills. Against other 9 shipping bills petitioner was given DEPB credit @ 20% with a Value cap of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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