TMI Blog1979 (9) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... ,531.23 in the petitioner s account P.L.A. No. 29 (Sugar). 2. W.P. No. 550 of 1977 is by Messrs Aruna Sugars Ltd, Pennadar, South Arcot district, for the issue of a writ of Mandamus or any other appropriate writ or order calling for the records relating to the application of the petitioners dated 20-3-1976 to the second respondent, the Assistant Collector of Central Excise, Pondicherry, relating to excise duty rebate of ₹ 11,10,828, granted under the Government of India s Notification dated 12-10-1974, for the sugar year 1974-75 and directing the second respondent to give credit for the said sum of ₹ 11,10,828, in the petitioners account P.L.A. (Sugar). 3. W.P. No. 551 of 1977 is by the same Messrs. Aruna Sugars Ltd, for the issue of a certiorified Mandamus calling for the records of the respondents relating to the Chief Accounts Officer s Order dated 21-5-1976 in C. No. IV/16/ 236/76 RF refusing the grant of excise duty rebate under the Government of India s notification dated 12-10-1974 for the sugar year 1974-75 and quashing the said order dated 21-5-1976 and directing the second respondent and the first respondent, the Union of India represented by the Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by M/s. Kothari Sugars Chemicals Limited, Madras, for the issue of a writ of certiorari or any other appropriate writ or order calling for the records of the Assistant Collector of Central Excise, Trichirapalli, the third respondent, relating to his order dated 18-2-1978 in C.A. No. V/1/3/177 for the sugar year 1972-73 and the order dated 17-8-1978 of the Appellate Collector of Central Excise, Madras, the second respondent, in A. No. 64/78/M.D.- C. No. V/1/11/78 and quashing those orders. 9. W.P. No. 978 of 1979 is by M/s. New Horizon Sugar Mills Private Limited, Pondicherry, for the issue of a certiorified mandamus or any other appropriate writ or order calling for the records relating to the order of the Assistant Collector of Central Excise, Pondicherry, the second respondent, dated 22-6-1977 in C. No. IV/16/134/76 M.P. II to the effect that excise duty rebate of ₹ 21,46,400 has been erroneously credited in the P.L.A. account of the petitioners and asking the petitioners to repay that amount, as confirmed by the Appellate Collector of Central Excise, Madras, the third respondent, by his order dated 16-1-1979 in A. No. 437/77(M)-7/1/35/77 and quashing those orders. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tember of the subsequent year, known as Sugar Year . During certain months of the sugar year, it is not possible to produce any sugar at all or as much sugar as could be produced in the other months of the sugar year. The Government of India gave rebate in excise duty to see that during those lean months sugar is produced in sufficient quantity. The Central Government has been issuing notification from time to time from the sugar year 1970-71 granting rebate in excise duty subject to certain terms and conditions. The Indian Sugar Manufacturers Association, New Delhi, has its branch Associations in different States. According to the petitioners, in 1971 that Association, hereinafter referred to as ISMA , obtained legal opinion and asked the Central Government about the correctness of that opinion in respect of the notification issued by the Central Government for granting rebate in excise duty and the Central Government replied that opinion was correct. In 1972 also, similar thing was done and the Central Government also stated that the opinion of the ISMA was correct. According to the petitioners, the factories worked hard and produced more sugar in the lean months of certain su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng period of the preceding five sugar years. .................................................. 3. In the case of a factory which has gone into production for the first time after 1967-68, the first two years of production shall not be taken into account while computing average production of the preceding five sugar years. 15. In the sugar year 1974-75, the petitioners in W.P. Nos. 436, 550, 2467 of 1977 produced sugar in excess of the average produced in the corresponding period of the preceding five years and they applied for rebate on the basis that they are entitled to rebate at ₹ 20/- per quintal regarding free sugar and ₹ 5/- per quintal regarding levy sugar in respect of 7.5% of the excess produced and at the other rates specified in the notification for the other slabs of sugar produced in excess of the average production. Thus calculated the rebate to which the petitioners in these writ petitions will be entitled would be ₹ 53,00,335.68, ₹ 26,35,142.80 and ₹ 34,54,170.49 respectively and they applied for credit for these amounts in their P.L.A. accounts. But the Excise Authorities held that the rebate to which the petitioners will b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 483 of 1979 relate to item 3-A, item 4 and item 1 respectively of the notification dated 4-10-1973 as amended by notification dated 20-4-1974. 19. Item 1 of the notification dated 12-10-1974 relating to W.P. Nos. 551 of 1977 and 1685 of 1978 reads : In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts sugar, described in column (2) of the Table below and falling under sub-item (1) of Item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from so much of the duty of excise leviable thereon as is specified in the corresponding entry in columns (3) and (4) of the said Table. TABLE S.No. Description of sugar Duty of excise Free Sale Sugar Levy Sugar (1) (2) (3) (4) 1. Sugar produced in a factory during the period commencing on the 1st day of October, 1974, and ending with the 30th day of November, 1974, in excess of the average production of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..................................................... ₹ 40/- per quintal. Provided that the exemption under this notification shall not be admissible to a factory : (a) which did not work during the base period, or (b) which had only a trial run in the base period, or (c) which commences production for the first time on or after the 1st day of October, 1972. .......................................................... 21. In W.P. Nos. 1685 and 2483 of 1979, we are concerned with items 4 and 1 respectively of the notification dated 4-10-1973 which reads : In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules 1944, the Central Government hereby exempts sugar, described in column (2) of the Table below and falling under sub-item (1) of Item No. 1 of the First Schedule to the Central Excises and Salt Act 1944 (1) 1944), from so much of the duty of excise leviable thereon as is specified in the corresponding entry in column (3) of the said Table. TABLE S. No. Description of Sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit being given therefor in their P.L.A. account, though there was no production during the corresponding period October and November during the preceding five years. The petitioners made a supplemental claim before the Assistant Collector, Central Excise, Pondicherry, for ₹ 2,00,308/- in respect of the excess sugar produced during October and November 1974 under item 1(b) of the same notification dated 12-10-1974. But the Inspector of Central Excise, Vridhachalam, by his letter dated 19-8-1975 asked the petitioners to refund the sum of ₹ 4,23,800/- for which credit had already been given, on the ground that there was no production of sugar during the corresponding months of the previous five years. The petitioners requested the Collector of Central Excise, Madras, and the Central Board of Revenue, New Delhi, for the withdrawal of the said letter dated 19-8-1975 and to allow the supplemental claim for ₹ 2,00,308/-. Both the requests were turned down by the authorities. 24. In W.P. No. 1625 of 1978, we are concerned with item 1 of the notification dated 12-10-1974 which also relates to the sugar produced during October and November 1974 in excess of the averag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endent of Central Excise, Trichirapalli, issued a notice dated 16-5-1977 asking the petitioners to show cause why the amount should not be recovered under Rule 10-A of the Rules on the ground that there was no production of sugar during October and November 1971 and the excise duty rebate had been erroneously credited in the account of the petitioners. The Assistant Collector of Central Excise, Trichirapalli, confirmed the demand by his order dated 1-3-1978. 27. In W.P. No. 4513 of 1978 also we are concerned with item 1 of the notification dated 28-9-1972 which relates to sugar produced during October and November 1972 in excess of the quantity produced during the corresponding period in 1971. Excise duty rebate of ₹ 3,67,160/- was credited in the P.L.A. account of the petitioners, on 31-1-1973 in respect of the sugar produced in October and November 1972. Subsequently, the Superintendent of Central Excise issued a show cause notice dated 16-5-1977 for recovery of the amount on the ground that it was erroneously credited and that they were not entitled to the rebate because there was no production during October and November 1971. The Assistant Collector of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nil . Subsequently the Assistant Collector, Central Excise, Pondicherry, issued a notice dated 30-6-1976 calling upon the petitioners to show cause why the amount should not be recovered on the ground that the rebate has been erroneously allowed and that the petitioners are not entitled to any rebate because there was no production of sugar in the corresponding period in 1973. On 26-3-1977, the Assistant Collector, Central Excise, Pondicherry, substituted Rule 10-A for rule 10 mentioned in the notice dated 3C-6-1976. The Assistant Collector, Central Excise, Pondicherry, directed repayment of the entire amount by his order dated 22-6-1977 which was confirmed, on appeal, by the Appellate Collector of Central Excise, Madras, by his order dated 16-1-1979. 30. We are concerned with item 1 of the notification dated 4-10-1973 in W.P. No. 2483 of 1979 which relates to the sugar produced during October and November 1973 in excess of the sugar produced during the corresponding period in 1972. Excise duty rebate of ₹ 6,00,840/- was granted to the petitioners by the Assistant Collector, Central Excise, Vellore, by his order dated 11-11-1974 by crediting the same in their P.L.A. acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and even if there was no production in the corresponding previous year or years, the petitioners will be entitled to rebate if there was production in the other months in the previous year or years and there was no production in the corresponding months of the previous year or years; (ii) in respect of the notification dated 28-9-1972, ISMA wrote a letter dated 14-10-1972 to the Central Board of Excise and Customs seeking confirmation of the presumption that the clarification given by the Central Board, Central Excise and Customs in the previous year would apply to the notification dated 28-9-1972 also, that is, if the factory worked in the base period (1st October, 1971 to 30th September, 1972) it will be entitled to the full rebate on its entire production during the various periods mentioned in the notification although during the corresponding periods in the last season, the production might have been nil . The Central Board of Excise and Customs informed the ISMA by letter No. 14/24/72-CX-1 dated 1-11-1972 that the presumption is confirmed in respect of established factories and not in respect of factories which had only a trial run during the base period. Even in the prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1974 respectively. The dates of show cause notices have been mentioned in these four writ petitions as 16-5-1977, 30-6-1976, 30-6-1976 and 26-8-1976 respectively. 34. In W.P. No. 436 of 1977, the respondents have admitted that the claim originally made by the petitioners for excise duty rebate of ₹ 32,35,803.75 was admitted by the Chief Accounts Officer and the petitioners were authorised to take credit for this amount in their P.L.A. account and that the petitioners made a supplemental claim on 16-3-1976 for an additional excise duty rebate of ₹ 20,64,531.93 and it was turned down by the Superintendent of Central Excise, Bhavani, by his letter dated 8-6-1976. In W.P. Nos. 436, 550 and 2467 of 1977 which relate to item 2 of the notification dated 12-10-1974 the contention of the respondents is that the different slabs of rebate allowed on the excess production during the period 1st December 1974 to 30th September 1975 are on the different percentage mentioned in that item with reference to the average production in the corresponding period in the preceding five years and not on the percentage of the excess production itself. 35. W.P. Nos. 551 of 1977 and 1625 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponding period, May and June 1973, they are not entitled to any excise duty rebate at all as per the proviso to the notification dated 4-10-1973 which says that the exemption mentioned against serial numbers 1 to 4 of the Table shall not be admissible to a factory which did not work during the base period, and, therefore, a show cause notice was issued calling upon the petitioners to explain why the sum of ₹ 21,46,400/- should not be repaid to the department and that the demand is in accordance with law. 38. W.P. No. 1685 of 1979 relates to item 4 of the notification dated 4-10-1973 and concerns sugar produced in the factory during July to September 1974 which is in excess of 110% of the quantity of sugar produced during the corresponding period in 1973. The contention of the respondents in this Writ Petition is that originally the entire 47,461.26 quintals of sugar produced during the incentive months July to September 1974 was treated as excess sugar produced and excise duty rebate of ₹ 18,98,450.40 at ₹ 40/- per quintal was allowed and that since it was found that as per the proviso the factory should have produced some quantity of sugar during the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the petitioners have not exhausted the alternative remedies available by way of an appeal or revision before coming to this Court by way of petitions under Article 226 of the Constitution of India and that those writ petitions are not maintainable. 41. In W.P. Nos. 436, 550 and 2467 of 1977, the question for consideration is as to how item 2 of the notification dated 12-10-1974 has to be interpreted, namely whether the percentages mentioned in that item have to be worked out on the basis of the average production as contended by the respondents or whether they have to be worked out on the basis of the excess production itself over the average of the preceding five sugar years as contended by the petitioners. In this contention, my attention was invited to the decision of Chinnappa Reddy, J. in W.P. Nos. 3502 and 4039 of 1976 on the file of Andhra Pradesh High Court. The learned Judge had to interpret the very same notification dated 12-10-1974 in those two writ petitions and he has observed thus : A fair reading of the notification appears to show that production of excess over the average production of the previous five years entitled the manufacturer to a rebate of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r upto 7.5% of average production . Since excess production is reckoned in relation to average production it is reasonable to hold that, `on excess production upto 7.5% means on excess production upto 7.5% of average production . The first interpretation appears to be more reasonable . 43. Mr. U.N.R. Rao appearing for respondents in these three writ petitions submitted that the interpretation of the notification dated 12-10-1974 accepted by Chinnappa Reddy, J. in those two writ petitions is the reasonable interpretation, whereas Mr. T.T. Vijayaraghavan submitted that the other interpretation of the notification is the only one and reasonable interpretation. 43A. The charging section 3 (1) of the Act lays down that: There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into any part of India as, and at the rates, set forth in the First Schedule . Sugar produced in a factory ordinarily using power in the course of production is one of the articles mentioned in the First Schedule of the Act. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out in negative sense. The courts will try to discover the real intent by keeping the decision of the statute intact. This is another cardinal rule of construction. Bearing in view the principle laid down by Their Lordships of the Supreme Court in this decision, it is necessary to consider which of the two interpretations of the notification dated 12-10-1974 considered by Chinnappa Reddy, J. in the aforesaid two writ petitions, has to be applied in these three writ petitions. 45. The object of giving rebate in excise duty in these and other cases is to encourage increased production of sugar in the lean months of the year. Certain basis has been adopted in each of the modification for giving the rebate. The earliest notification dated 13-10-1971 available in the records produced before me provides for grant of rebate at ₹ 17/- per quintal in respect of sugar produced in a factory during the period commencing from the 1st day of October, 1971, and ending with 30th day of November 1971, which is in excess of 80% of the quantity of sugar produced during the corresponding period in 1970 and at ₹ 16/- per quintal in respect of sugar produced in a factory during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on excess production on the next 10%, etc., without anything more would mean 7.5% of the excess production, the next 10% of the excess production, the next 10% of the excess production etc. and not upto 7.5% with reference to the average production of the preceding five years, the next 10% of the average production of the preceding five years etc. In the aforesaid decision. Their Lordships of the Supreme Court have laid down that in interpreting provisions of a statute inclusive of a statutory provision like the notification in the present case, the Courts have to give effect to the actual words used in the statutes or statutory provisions. The interpretation adopted by Chinnappa Reddy, J., in the aforesaid two writ petitions is possible only if the words of the average production are added to the different percentages mentioned in item 2 of the notification dated 12-10-1974 as has been done by the learned Judge and made clear in his observation in the passage extracted above, namely :- On the excess production on the next 10%, that is to say, on the next 10% of the average production of the previous five years, the manufacturer is entitled to rebate at the rate of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to excise duty rebate at ₹ 40/- per quintal in respect of free sale sugar and at ₹ 10/- per quintals in respect of levy sugar, the next 10%, namely 200 quintals will be entitled to excise duty rebate at ₹ 50/- per quintal in respect of free sale sugar and at ₹ 14/- per quintal in respect of levy sugar, the next 10%, namely 200 quintal will be entitled to excise duty rebate at ₹ 60/- per quintal in respect of free sale sugar and at ₹ 18/- per quintal in respect of levy sugar and the remaining excess, namely 1250 quintals alone would be entitled to excise duty rebate at the highest rate of 82% per quintal in respect of free sale sugar and at ₹ 22/- per quintal in respect of levy sugar. The excise duty rebate for the excess production of 2000 quintals over the average production of 1000 quintals would be ₹ 1,49,750 on the basis of the interpretation of item 2 of the notification dated 12-10-1974 accepted by Chinnappa Reddy, J., in respect of free sale sugar and only ₹ 35,500/- on the basis of the interpretation of that item of the notification rejected by the learned Judge. It would not have been the intention of the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spectively of the notification dated 4-10-1973. Admittedly there was no production in the factories of the petitioners in W.P. Nos. 551 of 1977 and 1625 of 1978 during October and November of the five years preceding 1974, in the factories of the petitioners in W.P. Nos. 1006,1016 and 4513 of 1978 during October and November 1971, in the factory of the petitioners in W.P. No. 978 of 1979 during May and June 1973, in the factory of the petitioners in W.P. No. 1685 of 1979 during August and September 1973 and in the factory of the petitioners in W.P. No. 2483 of 1979 during October and November 1972, whereas the claim for rebate made is in respect of excess sugar produced during October and November 1974 in W.P. Nos. 551 of 1977 and 1625 of 1978, in respect of excess sugar produced in October and November 1972 in W.P. Nos. 1006, 1016 and 4513 of 1978, in respect of excess sugar produced in May and June 1974 in W.P. No. 978 of 1979, in respect of excess sugar produced in August and September 1974 in W.P. Nos. 1685 of 1979 and in respect of excess sugar produced in October and November 1973 in W.P. No. 2483 of 1979. 48. In Etikoppaka Co-operative Agricultural Society Ltd. v. Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 to 30th September 1973, he would be entitled to rebate of certain excise duty on the whole of the sugar period during the relevant period in the year 1st October 1973 to 30th September 1974. The argument of the counsel for the Central Government was that in order to enable the manufacturer to the rebate of excise duty, he must have produced some sugar during the relevant periods in the base year. According to him, it was only when some sugar was produced during {he relevant period in the year 1972-73, sugar produced in the relevant period in the year 1973-74 could be said to have exceeded the sugar produced during the corresponding period in 1972-73. He drew my attention to the fact that the notification referred to quantity of sugar produced during the corresponding period in 1972-73. If no sugar was produced during the corresponding period in the year 1972-73, his argument was that the notification was inapplicable. This interpretation appears to me to be prima facie unreasonable. If no sugar was produced in the relevant period in the year 1972-73, it must be said that the production during the relevant period was nil and the excess sugar produced in the year 1973-74 should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober-November 1,971, October 1972 and October 1973 there was no production of sugar at all in the factory, which produced 31,435 quintals of sugar during November 1972, and 10,925 quintals of sugar during November 1973. The average production during October-November of the preceding five years was worked out as 8,472 quintals by dividing the total production during October and November of the previous five years, namely 42,360 quintals by five, and since the production during October and November 1974 was 23,800 quintals, the petitioners before Gokulakrishnan, J., claimed to have been entitled to excise duty rebate of ₹ 6,59,104/- at the rates mentioned in item 1 of the notification dated 12-10-1974. The Assistant Collector of Central Excise instructed the factory in that case to revise the claim for rebate on the ground that as there was no production during the corresponding period in three of the preceding five years and there was production only in the remaining two years, the average production should be arrived at by dividing the total production of 42,360 quintals by 2, and treating 21.180 quintals as the average production. On that basis, the Assistant Collector held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notwithstanding the fact that there was no production of sugar at all during August and September 1973, and that the petitioners in W.P. No. 2483 of 1979 would be entitled to excise duty rebate under item 1 of the notification dated 4-10-1973 notwithstanding the fact that there was no production of sugar at all during October-November 1972. 51. A plea of promissory estoppel has been raised by the petitioners in W.P. Nos. 551 of 1977 and 1006, 1016, 1625 and 4513 of 1978 and 978, 1685 and 2483 of 1979. In W.P. 551 of 1977. it is contended in the affidavit filed in support of the writ petition that it was not economical to produce sugar in October and November and it was to encourage production during such period, the notification dated 12-10-1974 was issued and that induced by that notification and the prior interpretation of the Government of a similar previous notification, the petitioners exerted themselves and produced sugar during October and November 1974. In W.P. 1006 of 1978 it has been contended in the affidavit filed in support of the writ petition that the grant of rebate mentioned in the letter dated 22-1-1973 of the Superintendent of Central Excise, Karur, was on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so stated that they had worked, out their profit and loss account on the basis of the excise duty rebate and paid higher cane price, bonus and taxes and acted to their detriment and that the Government of India is estopped from raising the demand for repayment of the rebate on a different interpretation of the notification. 54. In W.P. 4513 of 1978, the petitioners have stated in the affidavit filed in support of the writ petition that the grant of rebate allowed by the Superintendent of Central Excise on 31-1-1973 was on the basis of the correct interpretation of the notification of the first respondent dated 28-9-1972 and as per the clarification given by the Secretary, Government of India, that having interpreted their own notification correctly, it is not open to the respondents to give a different interpretation now and direct the petitioners to pay back the amount and that the first respondent should be estopped from revising their own orders and interpretations having regard to the fact that the petitioners have acted to their detriment in pursuance of such orders in finalising their accounts which cannot be reopened now after the lapse of so many years. 55. In W.P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the letter dated 8-11-1974, the petitioners have acted to their detriment and, therefore, the respondents are estopped from attempting to give a different interpretation of the notification dated 4-10-1973. 58. In the affidavit filed in support of Writ Petition 2483 of 1979, it is contended that it is not economical to produce sugar during October and November, and the notification dated 12-10-1973 was issued to encourage production of sugar during that period, that on the basis of the interpretation of the notification by the Government of India and induced thereby, the petitioners exerted themselves in producing sugar in the said lean months and to pay for the cane and close their accounts on the basis of the rebate granted to them and that the principle of promissory estoppel would apply and the respondents are not entitled to recover the rebate of ₹ 6,00,840/- credited to the petitioners. 59. In the counter affidavit it has been contended, as already stated, that there is no estoppel against law and that any clarification of the notifications made by any of the officers of the Government is not binding on the respondents who are statutory bodies. 60. Mr. K.N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce since no plot of the extent required by the Company was available within the area already acquired by the Government. All that she did, according to the note, was to encourage the Company to purchase land for setting up the industry at Rajpura, with perhaps an implied promise that a way would be found for favourably considering the claim of the Company for the concessions. Clearly there was no definite commitment on her part. That is why we find her pleading with the Ministers as late as on 1-4-1969 for an early settlement of the question. It is also obvious that she was not competent to take any final decision in the matter and she was, therefore, seeking the orders of the Ministers, The subsequent letters and telegrams from the Company to the Secretary, Industries Department also show that there was no final commitment on the part of the Government on 16-10-1968 as claimed by the Company. The facts are entirely different. In this batch of cases before me, it could not be stated that no definite promise was made by the Government by the several notifications with which we are concerned in these writ petitions that excise duty rebate would be given to the manufacturers of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnection the very same decision of the Supreme Court in Union of India v. Anglo-Afghan Agencies (A.I.R. 1968 S.C. 718) referred to in the judgment of Chinnappa Reddy, J., in Etikoppaka Co-operative Agricultural Society Ltd., v. Union of India (1978 A.W.R. 106) was strongly relied upon by the learned Counsel for the petitioners. In the case before their Lordships of the Supreme Court, the Textile Commissioner published on October 10, 1962, a scheme called the Export Promotion Scheme providing incentives to exporters of woollen goods. By the scheme as extended to Afghanistan, the exporters were invited to get themselves registered with the Textile Commissioner for exporting woollen goods, and it was represented that the exporters will be entitled to import raw materials of the total amount equal to 100 per cent of the f.o b. value of the exports. Under clause 10 of the scheme the Textile Commissioner had authority, if it was found that a fraudulent attempt was made to secure an import certificate in excess .of the true value of the goods exported, to reduce the import certificate. Their Lordships have observed in their judgment :- The orders which the Central Government may issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of the respondents is appropriately founded upon the equity which arises in their favour as result of the representation made on behalf of the Union of India in the Export promotion scheme, and the action taken by the respondents acting upon that representation under the belief that the Government would carry out the representation made by it. On the facts proved in this case, no ground has been suggested before the court for exempting the Government from the equity arising out of the acts done by the exporters to their prejudice relying upon the representation. This principle has been recognised by the Courts in India and by the Judicial committee of the Privy Council in several cases............ .. Jenkins, C.J. delivering the Judgment of the Court observed : `The doctrine involved in this phase of case is often treated as one of estoppel, but I doubt whether it is a correct, though it may be a convenient name to apply. It differs essentially from the doctrine embodied in Sec. 115 of the Evidence Act, which is not a rule of equity but is a rule of evidence that was formulated and applied in Courts of law; while the doctrine with which I am now dealing, takes its origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own proginal change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong, and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice. If this is the kind of detriment contemplated, it would necessarily be present in every case of promissory estoppel, because it is on account of such detriment which the promisee would suffer if the promisor were to act differently from his promise, that the court would consider it inequitable to allow the promisor to go back upon his promise. It would, therefore, be correct to say that in order to invoke the doctrine of promissory estoppel it is enough to show that the promisee has, acting in reliance on the promise, altered his position and it is not necessary for him to further show that he has acted to his detriment. Here, the appellant clearly altered its position by bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistry of Finance and the Central Board of Excise and Customs, have been referred in detail in the earlier portion of the Judgment. In view of this correspondence between ISMA and the Government of India and the Central Board of Excise and Customs, the petitioners in this batch of writ petitions are certainly entitled to contend that they were led to believe that excise duty 28-9-1972, 4-10-1973 and 12-10-1974 would be granted to them for production of excess sugar in the relevant period even though there had been no production of sugar at all during the period base period. The credit for the excise duty rebate, as anticipated by the petitioners in this batch of writ petitions, had been originally given in their P.L.A. accounts. It has not been disputed that the petitioners had finalised their accounts on the basis of the grant of excise duty rebate for the production of sugar in the periods in question and paid banus to their employees, additional price for the cane etc., and thus acted to their detriment. Under these circumstances, I agree with the learned Counsel for the petitioners in this batch of writ petitions that the principle of promissory estoppel applies and that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other sum of any kind payable to the Central Government under the Act or these rules, the proper officer may serve a notice on the person from whom such duty, deficiency in duty or sum is recoverable requiring him to show cause to the Assistant Collector of Central Excise why he should not pay the amount specified in the notice. 66. The learned Counsel for the respondents invited my attention to the decision of the Supreme Court in Assistant Collector of Central Excise v. National Tobacco Co. of India Ltd., 1975 E.L.T. (J 416) (A.I.R. 1972 S.C. 2563) where their Lordships have observed : Undoubtedly, a mechanical adjustment and ostensible settlement of accounts, by making debit entries, was gone through in the case before us. But, we could not equate such an adjustment with an assessment, a quasi-judicial process which involves due application of mind to the facts as well as to the requirements of law, unless we were bound by law to give such an unusual interpretation to the term assessment ......... Rules 10 and 10A, placed side by side, do raise difficulties of interpretation. Rule 10 seems to be so widely worded as to cover any inadvertence, error, collusion or mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise Rules read with Rule 173-J the period of limitation prescribed was one year from the date on which the duty was adjusted in the owner s account-current and therefore the impugned notices were time barred. The argument of the learned Counsel for the Central Government was that the case did not fall within Rule 10 but fell within Rule 1C-A. Rule 10(1) and Rule 10-A(1) may be usefully extracted. They are as follows :- `....................................... One of the arguments of the learned Counsel for the Central Government which was backed by a decision of the Patna High Court in Rohtas Industries Ltd. v. Superintendent, Central Excise was that rule 10 had no application at all to cases of adjustment under the self-removal procedure prescribed in Chapter VII-A of the Rules. This submission is without substance since rule 173-J occurring in chapter VIII-A expressly states that the provisions of rules 10 and 11 shall apply to the assessee as if for the expression three months , the expression one year were substituted in those rules. In view of rule 175-J, which I find was not noticed by the Patna High Court, I am unable to say that rule 10 will not apply to ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petitioners have not exhausted the alternative remedy and that the writ petitions are therefore not maintainable. The petitioners in W.P No. 551 of 1977 had not filed any revision against the order dated 19-6-1976 of the Appellate Collector of Central Excise, directing them to move the Assistant Collector, Central Excise, Pondicherry. On the ground that the Chief Accounts Officer who passed the impugned order dated 21-5-1976 is not the proper authority. It is seen from the counter affidavit filed in that writ petition that the petitioners had sent a letter dated 15-7-1976 to the Assistant Collector of Pondicherry, requesting him to withdraw the demand made by the Chief Accounts Officer for payment of ₹ 423800/- and also for payment of additional rebate of ₹ 2,00,308/- and that the petitioners have filed the writ petition before a final decision had been taken by the Assistant Collector, Central Excise, Pondicherry on that application. But it has not been contended in that counter affidavit that the writ petition is not maintainable. 69. In W.P. Nos. 1006 and 1016 of 1978, the petitioners have contended that since the impugned action had been taken only in pursuan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the judgment of Chinnappa Reddy, J. in Etikoppaka Co-operative Agricultural Society Ltd. v. Union of India 1979 E.L.T. (J 533) (1978 A.W.R. 106) referred to above that the collector of Guntur had stated in his trade notice dated 28-7-1976 that the notification dated 4-10-1973 was examined in detail at the highest level as to how the rebate is to be allowed for the production of sugar in a particular slab of the incentive period in cases where there was no production in the corresponding base period and that the subsequent interpretation has been given as per the decision now taken at the highest level. The learned Judge had observed in that judgment :- In the counters filed in the several writ petitions a point was raised that the petitioners had an alternate remedy by way of an appeal under section 35 of the Central Excise Act, and a revision to the Central Government under section 36. In my view, the pursuit of the remedy provided by the Act, in the circumstances of the case, having regard to the instructions issued by the Central Government, the highest authority under the Act, would only be an exercise in futility. The highest authority constituted under the Act havi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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