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M/s. Dharampal Satyapal Limited Versus Union of India and Others

2016 (5) TMI 1074 - GAUHATI HIGH COURT

Revoking the area based exemption - North Eastern India region - Jarda scented tobacco/pan masala containing tobacco - Validity of the Notification No. 11/2007-CE dated 1-3-2007 - notification taking away the benefits allowed to the appellant-firm under the Notifications No. 32/1999-CE and 33/1999-CE both bearing dated 8-7-1999 - applicability of doctrine of promissory estoppel - Held that:- The impugned Notification No. 11/2007-CE is hit by the doctrine of promissory estoppel for the following .....

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and - (c) While acting upon such promise, the appellant altered its position by investing sixty-nine crores of rupees in land, buildings, plants and machineries, office equipments, vehicles and stocks. - (d) The authority issuing the Notifications Nos. 11/04-CE and 28/04-CE acted within the scope of his authority. - (e) The impugned Notification No. 11/07-CE is ultra vires Section 5A of the Excise Act and is, therefore, not operative; there is thus no difficulty in invoking the doct .....

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equently appropriated by the respondent authorities. The respondents also point out that the Commissioner had initiated recovery measures against the appellant by issuing demand notices under Section 11A of the Excise Act for the period of 25-8-2003 to 8-7-2004 as it defaulted in paying back duty to the public exchequer on its own. It is further pointed out by the respondents that during the period from 25-8-2003 to 8-7-2004, the appellant availed of duty exemption to the order of ₹96,61,1 .....

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he respondents in recovering public money. - In our opinion, these specific averments made by the respondent authorities have not received satisfactory response from the appellant despite establishing a case of promissory estoppel thereby creating hurdle to its case for complete relief from this Court. No copies of the judgments relied upon by it are also annexed to the writ petition or the memo of appeal. In this view of the matter, the Investment Appraisal Committee shall have to take a c .....

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;96,61,11,858/- in the specified items for availing of the benefits made available under the Notifications No. 8/04-CE and 28/04-CE dated 21-1-2004 and dated9-7-2004 respectively within a period of two months.If the appellant can prove that it has actually invested ₹ 96,61,11,858/- or less, the Committee shall issue an Investment Certificate to that effect whereupon the respondent authorities shall refund to the appellant so much of the excise duty, which may become due to it, within a per .....

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away the benefits allowed to the appellant-firm under the Notifications No. 32/1999-CE and 33/1999-CE both bearing dated 8-7-1999 was challenged before the learned Single Judge, who, by the judgment dated 10-12-2010 in WP(C) No. 750 of 2010, dismissed the writ petition. Aggrieved by this, this appeal is NOW filed by the appellant-firm. 2. The facts giving rise to this appeal may be briefly noticed at the outset. The appellant is a company registered under the Companies Act, 1956 and has its unit .....

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the North Eastern Region. One of the incentives being initiated was to provide Central Excise and Income Tax Exemption on various excisable commodities/goods including tobacco products for a period of ten years from the date of commencement of commercial production or date of issuance of the Notification, whichever was later. In furtherance of such policy decision, the Central Government issued the said Notification No. 32/99-CE and 33/99-CE exempting some specified goods manufactured in the spe .....

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statement of the duty paid to the concerned Central Excise authorities and after due verification, the manufacturer was entitled to a refund of the duty paid. The exemption was available to all industrial units which had commenced their commercial production on or after 24-12-1997 or those industrial units that were in existence before 24-12-1997 but had undertaken substantial expansion by way of increase installed capacity by not less than twenty five per cent on or after 24-12-1997. The total .....

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is Notification provided a mechanism whereby the manufacturer was to submit a statement of the duty paid to the concerned a statement of the duty paid to the concerned Central Excise authorities and after due verification, the manufacturer was entitled to a refund of the excise duty paid. The exemption was available to all industrial units which had commenced commercial production on or after 24-12-1997 or those industrial units that were in existence before 24-12-1997 but had undertaken substan .....

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the Industrial Estate, Bamunimaidan, out of which 4 are involved in the manufacturing of tobacco. Three tobacco manufacturing units were also set up at Agartala pursuance to the 1997 Industrial Policy and the Notifications issued in connection therewith. According to the appellant, it has invested huge amounts in the North East by providing employment to the locals and stimulating industrialization in the region. Presently, it provides employment to about 2200 persons in its units and has plann .....

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s stated by the appellant that it satisfied all the requirements of the said Notification and availed of the benefits of exemptions from payment of excise duty made thereunder in respect of the finished goods manufactured and cleared by them. The appellant was also availing of the benefit of exemption under the Notification No. 33/99-CE and were claiming refund of the excise duly deposited by it in cash during the period from 17-11-2000 to 28-2-2001. The Excise Department after verifying the cla .....

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cigarettes stood excluded from the ambit of such exemption provided under the said two Notifications. Subsequently, the Central Government vide the Notification No. 1/2000-CE dated 17-1-2000 restored the said exemption to goods falling under Chapter 24 of the First Schedule or the Second Schedule of the Tariff Act. However, on 22-1-2001, the Central Government issued another notification, namely, Notification No. 1/2001-CE, removing the said exemption. This was soon followed by another Notificat .....

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spect of units that were located in the State of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland or Tripura and for those units that commenced commercial production on or after 24-12-1997 but not later than 28-2-2001 and that the units should have continued their manufacturing activities after 28-2-2001 and should have availed of the benefits under Notification Nos. 32/99-CE and 33/99-CE. The Notification further stipulated that the sum of duty payable but for the exemption was t .....

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tment of Industries of the State in which the investment was made. The manufacturer was required to prove to the satisfaction of the Committee that the investment was made for plant and machinery in a manufacturing unit located in the concerned State. Once the Committee was satisfied that the investment was made in the plant and machinery of the manufacturing unit, it was to issue a certificate to that effect to the manufacturer within a period of one month as above. The certificate was then to .....

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tion No. 66/2003-CE except that the investment could also be made in infrastructure or civil works or social projects apart from the investment in plants and machineries. Another Notification bearing No. 28/2004-CE was issued on 9-7-2004 making a series of procedural amendments to the said Notification No. 8/2004 wherein it was provided that the sum equal to the excise duty that was payable, but for the exemption, would be deposited by the manufacturer within 60 days from the end of the quarter .....

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cation also required the manufacturer to invest the amount so deposited in the Escrow Account within two years from the date of the deposits and the said amount withdrawn from the Escrow Account was to be utilized for the purpose specified within 60 days of its withdrawal. Condition (EA) of the said Notification provided that if the manufacturer failed to make the deposit or invest the amount specified within the stipulated period and in accordance with the Notification, then the duty equivalent .....

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t to the said Notifications No. 8/2004-CE and No. 28/2004-CE, the appellant executed a bond and entered into a Tripartite Escrow Agreement with the respondent No. 3 and the State Bank of India, Guwahati on 21-6-2005 whereby the State Bank of India was appointed as the Escrow Agent. It was further stipulated in the agreement that operations of the account including withdrawals from and closure of the said Escrow Account were to be made with the prior approval of the jurisdictional Commissioner of .....

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in balance in the Escrow Account. 7. It is the case of the appellant that the Central Government, contrary to the assurances made in the earlier Notifications pursuant to which it had made huge investments in the Region, issued the Notification No. 11/2007-CE, dated 1-3-2007 amending the said Notifications No. 08/2004-CE and 28/2004-CE respectively and withdrawing the benefits which had accrued to it thereunder. According to the appellant, the effect of this amendment is that the exemption conta .....

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would be entitled to the excise exemption for a period of ten years with effect from the dates of commencement of commercial production. 8. Subsequently, the Central Government issued the Notifications No. 21/2007-CE on 25-4-2007 amending the Notifications No. 32/99-CE and 33/99-CE and withdrawing the benefits which had accrued to the manufacturer under the said two Notifications. Resultantly, the exemption given in the said two Notifications became inapplicable to pan masala falling under Chap .....

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d unwarranted as well as defeats its legitimate expectation and the doctrine of promissory estoppel, the appellant unsuccessfully represented before the various authorities of the concerned Departments of both the Governments. However, it has come to the notice of the appellant that the Ministry of Commerce and Industries vide the Office Memoranda dated 22. 11. 2007, 24. 1. 2008 and 23. 2. 2009 requested the Ministry of Finance, Department of Revenue for taking a decision on the appellant s requ .....

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p companies without any rhyme or reason. According to the appellant, the Central Excise authorities and the Investment Appraisal Committee have been conducting their functions under the Notifications No. 8 and 28 illegally and arbitrarily in denying investment certificates to it and its group companies. Aggrieved by that, the appellant also filed WP(C) No. 591 of 2008, 1048 of 2008 and 2148 of 2008 challenging the arbitrary exercise of powers by the respondent authorities denying it the benefit .....

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or a period of 10 years for the goods specified therein vis-à-vis the industrial units identified, the entitlement of the petitioner and the grant thereof to it were admitted. The answering respondents averred that subsequent thereto though the Central Government issued notification No. 45 /99 dated 31. 12. 1999 under Section 5a of the Act whereby the notifications No. 32/99-CE and 33/99-CE dated 8. 7. 99 were amended with effect from that date excluding all tobacco related products falli .....

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Schedule of the Second Schedule of the Central Excise Tariff Act, 1995 and excluding all the goods from the purview of the notifications No. 32/99-CE and 33/99-CE dated 8.7.99 and the Notification No. 33/99-CE dated 8-7-99. According to the answering respondents, the Government of India, on a due consideration of the achievements in the realm of industrial development in the North East Region, mushroom growth of tobacco related companies and heavy refund due to excise duty exemptions, the Govern .....

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ortify their contention. 10. On a post-assessment of the arrangement so contemplated, the Government decided against the retention of Central Excise Duty for investment and thus issued notification No. 28/04 dated 9.7.2004 introducing Escrow Account Mechanism System and accordingly amended the contents of the notification No. 8/2004 dated 21.1.2004. The post- escrow period also witnessed various problems according to the answering respondents, as the Investment Appraisal Committee detected mis-u .....

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uld not be available to the goods cleared on or after the first day of March, 2007. 11. While reiterating that the promise of incentives under Policy 1997 had ceased with the amendment vide the Finance Act, 2003 read with the Ninth Schedule thereto excluding tobacco and other products specified therein from the purview of the exemption, the partial respite from this levy granted by the notification No. 69/03 dated 25. 8. 2003 and 11/07-CE dated 9.7. 2004 has been asserted to be independent of th .....

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ure to Section 154 of the Finance Act, 2003 whereby tobacco and goods covered under Chapter 21 of the First Schedule of the Tariff Act 1985 including pan masala had been withdrawn from the purview of exemption of the central excise duty as evidenced by the Ninth Schedule thereto. The impugned Notification dated 25.4.2007 has been justified on this plea as well as on the ground of public interest bearing in mind the adverse ramifications of the use of tobacco products and the resultant health haz .....

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mplated. 12. Reiterating its pleaded assertions, the appellant highlighted the inconsistency in the approach of the respondents in withdrawing the exemption from central excise duty on tobacco while sustaining the income tax exemption/rebate extended by the Policy 1997. According to it, the grant of exemption of excise duty after the incorporation of Section 154 of the Finance Act, 2003 by the Notification No. 69/2003-CE dated 25/8/2003 negated the case of the respondents that the promise of the .....

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the respondents No. 1 to 4 besides contending that the counter filed by the respondent No. 2 questioned the maintainability of the writ petition on the ground of delay as the impugned notification was dated 25.4.2007. Apart from asserting that the appellant even otherwise had failed to lay any factual foundation to invoke the doctrine of promissory estoppel, they accused it of suppression of the material fact that it had, the impugned notification notwithstanding, been paying central excise duty .....

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er IPR 2007, the saving clause, which entitled the units established under IPR 1997 to avail of the benefits for the remainder of the term was applicable only to units which were into manufacturing goods other than those listed in the negative list. Assailing the reliance placed by the learned Single Judge upon the fact that making the industries indulging in manufacturing of goods in the negative list would render Section 154 of the Finance Act, 2003 redundant, the learned senior counsel submit .....

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saving clause of IPR 2007 would not be rendered redundant if the units manufacturing products, which are listed in the negative list, are also given the benefit of the same. He also contends that the withdrawal of benefits promised under the Notification No. 8/2004-CE dated 21-1-2004 and No. 28/2004-CE dated 9-7-2004 by the Notification No. 11/2007-CE and Notification No. 21/2007-CE is arbitrary and unreasonable inasmuch as the respondent authorities could not have withdrawn the Excise Duty exem .....

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reiterated the same contentions urged before the learned Single Judge and further submits that the legality of the withdrawal of the benefit granted to the tobacco manufacturing units such as the appellant under the 1997 Industrial Policy by Section 154 of the Finance Act, 2003 was already upheld the Apex Court in R.C. Tobacco (P) Ltd., v. Union of India, (2005) 7 SCC 725. He, therefore, submits that the impugned judgment is perfectly in order and does not warrant the interference of this Court .....

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hat the right question to be asked for effective adjudication is: Whether the State-respondents are barred by the doctrine of promissory estoppel from issuing the impugned Notification No. 11/2007-CE dated 1-3-2007 withdrawing full and partial exemption of excise and excise tariff duty extended to the appellant made available to it by the Notification No. 8/2004-CE dated 21-1-2004 and the Notification No. 28/2004-CE dated 9-7-2004? To appreciate the controversy, the text of the impugned Notifica .....

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atisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the Notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 8/2004-Central Excise, dated 21st January, 2004 which was published in the Gazette of India, /extraordinary, vide number G.S.R. 60-(E) of the same date, namely:- In the said Notification, after paragraph 1, the following paragraph shall be inserted, namely:- 2. The exemption contained in .....

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t amended by Notification No. 28/2004-Central Excise, dated 9th July, 2004, and published vide number G.S.R. 419(E), dated 9th Jly, 2004. 16. A close look at the Notification No. 8/2004, dated 21-01-2004 will show that all goods falling under sub-heading 2401.90, 2402.00, 2404.41, 2404.49, 2404.50 or 2404.50 of the First Schedule and the Second Schedule to the Tariff Act were exempted from payment of the whole of the duties of excise, additional duties of excise leviable under the Tariff Act, th .....

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e Tariff Act. However, by the impugned Notification No. 11/07-CE, the exemptions from payment of excise and additional excise duties so leviable earlier would no longer be available to goods cleared on or after 1-3-2007. However, in so far as goods cleared on or before 28-2-2007 and in respect of which the exemption had already been availed of are concerned, the condition specified in the Notification No. 8/2004, dated 21-1-2004 would continue to apply. 17. It needs to be recapitulated that in o .....

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ther cognate Notification dated 33/1999-CE dated 8-7-1999 was issued by the GOI exempting goods mentioned therein from payment of excise duty leviable from the manufacturers. Soon thereafter, the GOI vide the Notification No. 45/99-CE dated 31-12-1999 amended the said two notifications excluding goods falling under Chapter 24 or heading No. 21.06 of Schedule I or II of the CET Act. However, even before the end of one month, the Notification No. 1/2000-CE dated 17-1-2000 reversed the changes made .....

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r Chapter 24 of Schedule I stood excluded. Thereafter, the Parliament passed the Finance Act, 2003, which came into force on 1-4-2003, by, among others, enacting Section 154 amending the said Notification No. 32/99-CE with effect from 8-7-1999 i.e. retrospectively providing that the exemptions notified therein should not be applicable to: (i) cigarettes falling under Chapter 24 of the 1st Schedule or the 2nd Schedule of the CET Act; (ii) pan masala containing tobacco falling under sub-heading No .....

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alaya, Nagaland and Tripura and for those units which had commenced commercial production on or after 24-12-997 but not later than 28-2-2001 and the units should have continued its manufacturing activities after 8-2-2001 and should have availed of the benefits under the Notification No. 32/99-CE and 33/99-CE subject, however, to their fulfilling certain conditions stipulated therein. This was followed by another Notification No. 8/2004-CE dated 21-1-2004 exempting goods falling under the said th .....

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strial and Investment Promotion Policy, 2007 containing a saving clause declaring that industrial units which have commercial production on or before 31-3-2007 would continue to get benefits/incentives under NEIP, 1997 . The new Policy included a negative list which excluded units manufacturing certain class of goods from eligibility under new Policy related exemption. This negative list included (i) all goods falling under Chapter 24 of 1st Schedule, CET Act which pertains to tobacco and manufa .....

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r Chapter 21; goods falling under Chapter 24 and plastic bags of less than 20 microns from the ambit of exemption. 19. Aggrieved by this Notification No. 11/2007-CE dated 1-3-2007, the writ petition was filed before the learned Single Judge for quashing the same and to issue a writ of mandamus directing the respondent authorities to restore the benefits under the Notification Nos. 08/04-CE and 28/04-CE to the North East Region. At this stage, it may not be out of place to reproduce hereunder the .....

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the duty of excise leviable thereon: Provided that, unless specifically provided in such notification, no exemption therein shall apply to excisable goods which are produced or manufactured- (i) in a free trade zone and brought to any other place in India; or (ii) by a hundred per cent export-oriented undertaking and [brought to any other place in India. Explanation.-In this proviso, free trade zone and hundred per cent export-oriented undertaking shall have the same meanings as in Explanation 2 .....

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duty of excise, under circumstances of an exceptional nature to be stated in such order, any excisable goods on which duty of excise is leviable. (2-A) The Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification in the Official Gazette at any time .....

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r the levy of a duty on such goods at a rate expressed in a form or method different from the form or method in which the statutory duty is leviable and any exemption granted in relation to any excisable goods in the manner provided in this sub-section shall have effect subject to the condition that the duty of excise chargeable on such goods shall in no case exceed the statutory duty. Explanation.- Form or method , in relation to a rate of duty of excise means the basis, namely, valuation, weig .....

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until it is amended, varied, rescinded or superseded under the provisions of this section.] (5) Every notification issued under sub-section (1) 9 [or sub-section (2-A)] shall,- (a) unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette; (b) also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations, Customs and Central Excise, New Delhi, under the Central Boar .....

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l Government from time to time under Section 5-A of the Excise Act. In this state of affairs of flip-flop decisions by the Central Government, the appellants are seeking the protection of the doctrine of promissory estoppel. What is the doctrine of promissory estoppel is explained in by Lord Denning in his inimitable words: A man should keep his word. All the more so when the promise is not a bare promise but is made with the intention that the other party should act upon it. Just as contract is .....

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ack on his promise. It should not be necessary for the other party to show that he acted to his detriment in reliance on the promise. It should be sufficient that he acted on it. The Apex Court in Amrit Banaspati Co. Ltd. v. State of Punjab,(1992) 2 SCC 411 also explained doctrine in the following manner: 3. Law of Promissory Estoppel which found its most eloquent exposition in Union of India v. Indo-Afghan Agencies Ltd. (1968) 2 SCR 366 : AIR 1968 SC 718 crystallised in Motilal Padampat Sugar M .....

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taken further when it was held that no duty of excise was assessable on cigarettes manufactured by assessee by including, cost of corrugated fibreboard containers, when it was clearly represented by the Central Board of Excise and Customs in response to the submission made by the Cigarette Manufacturers Association - and this representation was approved and accepted by the Central Government - that the cost of corrugated fibreboard containers would not be includible in the value of the cigarett .....

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rement of the doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. (Underlined for emphasis) 21. The doctrine, however, has certain limitations as held by the Apex Court in Godfrey Philips India Ltd. (supra). This is what it said: 13. Of course we must make it clear, and that is also laid down in Motilal Sugar Mills case (supra) that there can be no promissory estoppel against the Legislature in the exercise of its legislative fun .....

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e, it must yield when the equity so requires; if it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authority. The doctrine of promissory estoppel .....

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hereunder para 30 of the judgment of the Apex Court in Pawan Alloys & Casting Pvt. Ltd., Meerut v. UP State electricity Board and others, (1997) 7 SCC 251: 30. Shri Dave next invited our attention to a three-Judge Bench judgment of this Court in the case of Shrijee Sales Corpn. wherein A.M. Ahmadi, C.J., speaking for the Bench considered the correctness of the aforesaid decision in Kasinka Trading10. As the decision in Shrijee Sales Corpn. (1997) 3 SCC 398 has laid down the parameters of th .....

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t is not necessary for us to go into a historical analysis of the case-law relating to promissory estoppel against the Government. Suffice it to say that the principle of promissory estoppel is applicable against the Government but in case there is a supervening public equity, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons .....

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d bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance w .....

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sible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable. Vide Emmanuel Ayodeji Ajayi v. Briscoe (1964) 3 All ER 556. 4. Two propositions follow from the above analysis: (1) The determination of applicability of promissory estoppel against public authority/Government hinges upon balance of equity or public interest . (2) It is the Court which has to determine whether the Government should be held exemp .....

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se on the basis of which the promisee might have acted, if public interest required recall of such a promise and such a public interest outweighed the interest of the promisee then the doctrine of promissory estoppel against the Government would lose its rigour and cannot be of any avail to such promisee. In the aforesaid decision the further contention canvassed on behalf of the appellant-promisee was also examined. That centred round the question whether the notification having fixed a time-li .....

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e 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(1964) 3 All ER 556 quoted in M.P. Sugar Mills (1997) 2 SCC 409 : 1979 SCC (Tax) 144 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, gi .....

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ct to the new initiatives for industrial development in the region. The object of the policy is to attract investment by promising exemption from payment of excise duty, additional duty of excise and income tax for a period of ten years from the date of commencement of commercial production or the date of issue of such Notification, whichever, was later, to bring about the development of infrastructural facilities and industries in the region. It is the specific case of the appellant that acting .....

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to 28-2-2001. The Excise Department, in turn, after verifying the claims for the refund used to refund the excise duty deposited into it during that period. 24. By announcing the North East Industrial Policy, 1997 implemented by the Notifications No. 32/99-CE and 33/99-CE, it can truly be said that the respondents have held out a promise to exempt the manufacturer of the specified goods from payment of excise duty and additional excise duty for the next ten years subject, however, to fulfilment .....

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n 31-12-199 and 17-1-2000 during which it was not available), was rescinded retrospectively. This meant that the excise duty already refunded to the manufacturers would be liable to be recovered, no further refund would be made and that the manufacturers would be liable to pay the excise duty not paid when the exemption was in force i.e. between 8-7-1999 and 27-1-2001. If that is the end of the matter, the appellant may not have any case at all. But then, the respondent authorities thereafter is .....

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had commenced commercial production on or after 24-12-997 but not later than 28-2-2001 and the units should have continued its manufacturing activities after 8-2-2001 and should have availed of the benefits under the Notification No. 32/99-CE and 33/99-CE subject, however, to their fulfilling certain conditions stipulated therein issued the Notifications No. 8-4-04-CE dated 21-1-2004 exempting goods falling under the said the Notification No. 69/2003-CE from 100% duties of excise subject certai .....

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llant that inasmuch as Section 154 of the Finance Act, 2003 was enacted prior to the said three Notifications, it has no relevance in this case nor can it have any adverse effect on the rights already accrued to the petitioners thereunder. The impugned Notification No. 11/2007-CE dated 1-3-2007 was issued in exercise of the powers conferred under Section 5A(1) of the Excise Act. The contention of the learned senior counsel for the appellant is that the impugned Notification, in so far as it take .....

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is required in this behalf, we may conveniently refer to Mahabir Vegetable Oils (P) Ltd. V. State of Haryana, (2006) 3 SCC 620. This is what the Apex Court said: 38. The promises/representations made by way of a statute, therefore, continued to operate in the field. It may be true that the appellants altered their position only from August 1996 but it has neither been denied nor disputed that during the relevant period, namely, August 1996 to 16-12-1996 not only have they invested huge amounts b .....

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tification dated 16-12-1996 whereby and whereunder solvent extraction plant was for the first time inserted in Schedule III i.e. in the negative list. 39. Both the provisions contained in Schedule III and Note 2 formed part of subordinate legislation. By reason of the said note, the State did not deviate from its professed object. It was in conformity with the purport for which original Rule 28-A was enacted. 40. We, in this case, are not concerned with the quantum of exemption to which the appe .....

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ners thereof. 42. It is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication. (See West v. Gwynne(1911) 2 Ch 1 : 104 LT 759 (CA).) 26. Thus, in our opinion, prima facie, the impugned Notification No. 11/2007-CE is hit by the doctrine of promissory estoppel for the following reasons: (a) By the North East Industrial Policy, 1997 impleme .....

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n by investing sixty-nine crores of rupees in land, buildings, plants and machineries, office equipments, vehicles and stocks. (d) The authority issuing the Notifications Nos. 11/04-CE and 28/04-CE acted within the scope of his authority. (e) The impugned Notification No. 11/07-CE is ultra vires Section 5A of the Excise Act and is, therefore, not operative; there is thus no difficulty in invoking the doctrine of promissory estoppel. 27. It is not, however, necessary for the appellant to further .....

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f course, it is possible for the appellant to restore the status quo ante, but if that is not possible, the promise would become final and irrevocable. As already held by the Apex Court in Motilal Padampat Sugar Mills Co. Ltd. (supra), this Court will not act on the mere ipsi dixit of the Government, for it is the Court which has to decide and not the government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Gover .....

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n the Notification No. 69/03 dated 25-8-2003 and the Notification No. 8/04-CE dated 21-1-04 which is known as pre-escrow period, the appellant is shown to have invested ₹100 crores out of which only an amount of ₹34 crores was certified by the Investment Appraisal Committee to have been invested and (ii) the Industrial Policy Resolution dated 1-4-2007 issued by the Ministry of Industry and Commerce inserted negative list which included tobacco products and pan masala enabling the wit .....

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production on or before 31-3-2007 will continue to get benefits/incentives under the NEIP, 1997 notwithstanding the inclusion of tobacco products and pan masala among the negative lists as items ineligible for benefits under NEIP, 2007. Indisputably, the units of the appellant had commenced commercial production on or before 31-3-2007. This is evident from the Office memorandum dated 1-4-2007 which categorically stated that industrial units which had commenced commercial production on or before .....

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as will be evident hereafter, it may not no longer be possible to restore the status quo ante. Therefore, the State-respondents are barred by the doctrine of promissory estoppel from issuing the impugned Notifications No. 11/2007-CE dated 1-3-2007 withdrawing full and partial exemption of excise and excise tariff extended to the appellant made available to it by the Notification No. 8/2004-CE dated 21-1-2004 and Notification No. 28/2004-CE dated 9-7-2004. However, the appellant is not yet out o .....

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leged by the Respondent No. 2. It is denied that the funds from Escrow Account were not utilized in a proper manner. It is submitted that the Respondent No. 2 be put to strict proof of the same. In fact, the petitioner has faced immense difficulty in obtaining the benefit under the exemption notifications even during the subsistence of the exemption period. The Respondent and its Central Excise Officials have been engaged in numerous illegal and arbitrary actions of appropriating huge amounts of .....

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titioner was constrained to file writ petitions challenging the arbitrary actions of the Respondents and the other Central Excise Authorities. The Petitioner has accordingly filed WP(C) Nos. 591/2008, 1048 of 2008 and 2148 of 2008 challenging various aspects of illegal and arbitrary functioning of the authorities motivated at depriving the Petitioner of benefits granted under the excise exemption notifications and these petitions have been allowed in favour of the Petitioner vide judgment dated .....

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chineries and social infrastructure project, whereas the balance remained un-invested which was subsequently appropriated by the respondent authorities. The respondents also point out that the Commissioner had initiated recovery measures against the appellant by issuing demand notices under Section 11A of the Excise Act for the period of 25-8-2003 to 8-7-2004 as it defaulted in paying back duty to the public exchequer on its own. It is further pointed out by the respondents that during the perio .....

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