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2016 (5) TMI 1074 - GAUHATI HIGH COURT

2016 (5) TMI 1074 - GAUHATI HIGH COURT - 2016 (339) E.L.T. 379 (Gau.) - 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/ .....

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to a refund of excise duty, and had, therefore, acted upon such promise; 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, th .....

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ructure 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 period from 25-8-2003 to 8-7-2004 .....

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ead, the appellant resorted to litigations causing inordinate delay to the 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 .....

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f hearing to the appellant to prove that it has actually invested ₹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 appell .....

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al Government in the Ministry of Finance (Department of Revenue) 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 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 appellan .....

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rial Policy dated 24-12-1997 for facilitating industrial development in 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. 32/9 .....

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tification provided a mechanism whereby the manufacturer was to submit 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 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 .....

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or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh. This 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 u .....

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s so assured, it set up a total of 15 manufacturing units at Guwahati in 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, .....

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icles : ₹40.01 Stocks : ₹5089.89 Total : ₹6911.03 It is 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 fro .....

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o products including pan masala containing tobacco, chewing tobacco and 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, .....

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d be subject to certain conditions that it would be available only in respect 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 fur .....

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e in which the unit was located and the Principal Secretary of the Department 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 manufact .....

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to 100% from 50% with similar procedural stipulations as in the Notification 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 d .....

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to account the conditions specified in the said Notification. The Notification 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 .....

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to invest the amount so withdrawn within the prescribed time. 6. Pursuant 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 .....

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specified under Section 11 (AB) of the Excise Act with the amount lying 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 .....

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and 2007, though the Central Government had held out the promise that it 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 sai .....

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and 28/04-CE. Contending that such unilateral withdrawal is arbitrary and 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 Fina .....

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iating huge amounts of money lying in their escrow accounts and its group 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 .....

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8. 7. 1999, the incentives thereunder including central excise holiday for 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 .....

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xcise duty exemption on all goods falling under Chapter 24 of the First 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 rela .....

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ment of the Central Act, 1944 by the Finance Act 2003 has been made to fortify 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 ans .....

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04-CE dated 21-1-2004 clarifying that the exemption contained therein would 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. 200 .....

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Policy 2007, the answering respondents traced the root of the said measure 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 r .....

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did not yield any noticeable progress or industrial development as contemplated. 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 dat .....

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n issuing the impugned notification. 13. In their additional affidavit, 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, th .....

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learned Single Judge has patently fallen into error in holding that under 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 1 .....

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goods falling under Chapter 24 of Schedule I or II of CET Act, then the 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 .....

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Mr. S.C. Keyal, the learned Assistant Solicitor General of India (ASG), 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 i .....

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ll never get the right answer! In this writ appeal, we are of the view that 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- .....

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f the Finance Act, 2001 (14 of 2001), the Central Government, on being satisfied 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 follow .....

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ordinary, vide number G.S.R.60(E), dated 21st January, 2004, and was last 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 .....

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ed that these items are enumerated in Chapter 24 of First Schedule to the 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- .....

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ria for becoming eligible to avail of the exemption. Simultaneously, another 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, .....

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e Notifications No. 32/99-CE and 33/99-CE whereby the goods falling under 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 .....

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e units located in the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, 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 .....

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romotion, Ministry of Industry and Commerce launched the North East Industrial 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 .....

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ification No. 32/99-CE which has the effect of excluding pan masala under 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 Regi .....

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isable goods of any specified description from the whole or any part of 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 expo .....

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so to do, it may, by special order in each case, exempt from payment of 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, .....

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nafter referred to as the statutory duty) may be granted by providing for 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 relat .....

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shall continue to have the same force and effect after such commencement 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 .....

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ted that the above Notifications for exemption were issued by the Central 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 th .....

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not only to equity but also to good faith, to allow the promisor to go back 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. (19 .....

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Godfrey Philips India Ltd. (1985) 4 SCC 369 : 1986 SCC (Tax) 11 and was 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 fi .....

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The alteration of position by the party is the only indispensable requirement 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 .....

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out that the doctrine of promissory estoppel being an equitable doctrine, 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 .....

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the doctrine of promissory estoppel, we may also refer to and reproduce 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 .....

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ion Ahmadi, C.J., in paras 3 and 4 of the Report observed as under: 3. It 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 ce .....

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verriding public interest requires that the Government should not be held 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 .....

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onable opportunity of resuming his position provided of course it is possible 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 .....

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t the Government or any other competent authority had held out any promise 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 ce .....

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urther observed that 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(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 p .....

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nd 33/99-CE were initially issued by the Central Government to give effect 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 indust .....

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nd of the duty deposited by it in cash during the period from 17-11-2000 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 addit .....

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f cigarettes from 1999 up to 27-1-2001 (except for a short period between 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 .....

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ssam, Manipur, Meghalaya, 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 issued the Notifications No. 8-4-04-CE dated 21-1-2004 exempting goods falling under the said t .....

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re is force in the contention of the learned senior counsel for the appellant 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 f .....

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l not be affected by an amendment to the Notification. If any authority 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, name .....

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uity operated in favour of the entrepreneurs by issuing Note 2 to the notification 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 .....

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gislation. A delegatee therefore can make rules only within the four corners 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 .....

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nd (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 doctrine of promissory e .....

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llant even where there is no such overriding public interest provided, of 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. Th .....

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. During the period w.e.f. 25-8-2003 to 21-1-2004 i.e. the period between 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 negat .....

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s clearly provided that industrial units which had commenced commercial 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 .....

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nvestment, though the quantum whereof is not ascertainable at this stage 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 Notificatio .....

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bmitted that there has been no misuse and mis-utilization of funds as alleged 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 .....

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s and irregularities conducted by the Central Excise Authorities, the Petitioner 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 peti .....

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the Investment Appraisal Committee by way of investment in plants and machineries 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 .....

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