TMI Blog2000 (11) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... g its members control the prices of similar categories of steel, though however, the same is restrictive in its application and is made applicable to supplies effected by the main steel producers only, viz. Tata Iron Steel Co. Ltd., Indian Iron Steel Co. Ltd. and Hindustan Steel Ltd. (Presently Steel Authority of India Ltd.) The records depict that consequent on the increase in excise duty in steel materials under Government of India Notification dated 17th March, 1972, the prices of steel materials were directed to be inclusive of JPC contribution to the re-roller Freight Differential Fund, Equalised Freight Element and provision for JPC Engineering Goods Export Assistance Fund. The inclusion of the above were made applicable to various categories of materials including Bar, Rods, Slabs Blooms, Coil, Billets etc. as appears from JPC announcement No.81 dated March 20, 1972. It is, however, significant to note that by reason of the inclusion of the JPC price elements as above, the domestic price for iron and steel materials has always been higher than the international price of steel and resultantly demand for imported steel rather than the indigenous manufacture was on an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oucher for purchase of steel/pig iron from Main Producers in original or the following documents: 1. Auditor/chartered Accountants Certificate in the prescribed format to the effect that no imported steel/pig iron has been utilised in the goods exported by the company. 2. An indemnity Bond in prescribed format indemnifying Government against any wrong payment on account of wrong calculation and / or for use of imported steel materials. C) .the reimbursement benefit may be claimed by any one of the two parties provided the claimant is a registered exporter and otherwise eligible to get reimbursement benefit under this scheme; (Emphasised) 2.8 . v) The claim for reimbursement would be made only in respect of consumption of indigenous steel and pig iron procured from the main producer or other sources. Claims for reimbursement would not be admitted against consumption of Steel / pig iron imported against Advance License under the Duty Exemption Scheme and against imprest / REP license or under OGL. No claims will be admitted in case Customs duty refund has been claimed / will be claimed under brand rate of duty drawback for such steel / pig iron. (Emphasised) Further fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government or by attachment of our assets, shareholding and goodwill as also to stop all further payment/assistance to the obliger as available to the exporters. The facts in issue: The factual score depicts that in terms of the Scheme as above, the appellant claimed benefits on the basis thereof and payments have also been made to the extent of differential element involved in the price structure. The factual score however disclose that the appellant while exporting engineering goods did use its own manufactured steel items without involvement of any of the price elements as declared by JPC and as noticed above. It is on this score however, the Engineering Export Promotion Council subsequently by its letter dated 23rd November, 1992 refused to recognise the appellants entitlement to avail of the benefit of the Scheme. The Council expressly communicated that a sum of ₹ 10,37,96,604/- was paid in excess under a bona fide mistake being discovered later. The Council in addition to the claim above-said also claimed interest at the rate of 18% per annum. The appellant however, in turn by its letter dated 19th January, 1993 while recording acceptance of the factum of user o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the JPC prices and the international prices. (5) There is no provision in the Scheme for diminishing or altering the JPC prices to conform to a price actually paid by the manufacturers/exporters for the steel. (6) For non-JPC categories of steel to be used in the manufacture, the domestic price would be the SAIL price. SAIL prices do not include JPC levies. (7) The Scheme disregards the actual price paid by the manufacturer/exporter for the domestic steel. He may have paid to the producer of steel a higher or lower price than the JPC price. This is ignored by the Scheme and the uniform JPC price is taken. (8) Though the Scheme uses the word reimbursement, in the context of the Scheme, there is no repayment to the exporter. The word reimbursement here truly means the payment to the exporter of the price difference between the higher domestic price and the lower international price, i.e. to say a subsidy for exports. Mr. Andhyarujina, learned senior counsel, very strongly commented that after the commencement of the Amendment on 17th of October, 1985 the exporters of the engineering steel product could procure the indigenous steel and pig iron from any source in the country sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the country and admittedly further TISCO was captively consuming steel manufactured by it in the export product being steel tubes and it is on this score that they claimed the benefits of the IPRS from 1985 onwards and allowed till 1992 when the respondents said to have illegally denied the appellant the full benefits on the ground that it has not paid the special levies in the JPC price structure. Contentions raised on behalf of the Respondents: It is in this perspective that learned Attorney General contended that IPRS was evolved to avoid financial sufferance to the Indian manufacturer of iron and steel products from out of indigenous steel having the four basic price elements known in common English parlance as the JPC price namely, (i) Engineering Goods Export Assistant Fund (EGEAF) (ii) Steel Development Fund (SDF) (iii) Freight Equalisation Fund (FEF) and (iv) JPC Cess. Admittedly, JPC pricing is higher than international pricing as is available in the steel market in the country but in order to make sure utilisation of the indigenous steel from the main producers, the quality of which stands tested , and to curb and combat the financial stress on the manufacturers, the IPRS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Government while framing the IPRS was to protect the interest of exporters of the engineering goods where the JPC or the domestic price (which includes a number of levies) was more than the international pricing. The appellant TISCO admittedly has not paid the JPC price which includes various levies of the raw materials used for the product. As a matter of fact they cannot have any reimbursement for expenses which they have never incurred. As per the calculation made by the respondents an amount of ₹ 10,37,96,604/- is recoverable from TISCO on account of over payment of which a sum of ₹ 6,75,00,298/- stands adjusted by the Union of India against the payments respectively and a balance amount of ₹ 3,62,96,306/- is yet to be recovered as contended by the respondents. On a true reading of the Scheme and various clauses thereunder together with the available meaning on the basis of the language used, the IPRS Scheme cannot possibly cover a situation as is in the present context. We are afraid that in the event the appellant is permitted and allowed to enjoy the benefits in terms of the scheme, the situation would be rather not only of unjust enrichment bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncer Bower and Turner: Estoppel by Representation 3rd Ed.). Lord Denning also in the case of Central Newbury Car Auctions Ltd. v. Unity Finance Ltd. (1956 (3) All ER 905) appears to have subscribed to the view of Lord Dixon, J. pertaining to the test of detriment to the effect as to whether it appears unjust or unequitable that the reprsentator should now be allowed to resile from his representation, having regard to what the representee has done or refrained from doing in reliance on the representation, in short, the party asserting the Estoppel must have been induced to act to his detriment. So long as the assumption is adhered to, the party who altered the situation upon the faith of it cannot complain. His complaint is that when afterwards 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 original change of position will operate as a detriment.(vide Grundts: High Court of Australia (supra)). Phipson on Evidence (Fourteenth Edn.) has the following to state as regards estoppels by conduct. Estoppels by conduct, or, as they are still sometimes called, estoppels by matter in pais, were anciently acts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prompting the assured to alter his position or status.. The contextual facts however, depict otherwise. Annexure 2 to the application form for benefit of price protection contains an undertaking to the following effect:- We hereby undertake to refund to EEPC Rs.---- the amount paid to us in full or part thereof against our application for price protection. In terms of our application dated against exports made during In case any particular declaration/certificate furnished by us against our above referred to claims are found to be incorrect or any excess payment is determine to have been made due to oversight/wrong calculation etc. at any time. We also undertake to refund the amount within 10 days of receipt of the notice asking for the refund, failing which the amount erroneously paid or paid in excess shall be recovered from or adjusted against any other claim for export benefits by EEPC or by the licensing authorities of CCI C. and it is on this score it may be noted that in the event of there being a specific undertaking to refund for any amount erroneously paid or paid in excess (emphasis supplied), question of there being any estoppel in our view would not arise. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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