TMI Blog2016 (1) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... e and acted upon it. The licence is fundamentally, when is accepted, a contract though its execution might flow from any statutory power. The doctrine therefore applies even to the licence agreement. In view of the saving clause as engrafted in NEIIPP, 2007, as the petitioners’ units have commenced commercial production on or before 31-12-2007 will continue to get benefits/incentives under NEIP, 1997 in terms of the N/N. 8/2004-C.E., dated 21-1-2004 subject to the notification dated 25-4-2007. For deposit, the petitioner would get relaxation for purpose of counting limitation in terms of N/N. 28/2004-C.E., dated 9-1-2004. The limitation would start from this day for compliance of the modality as laid down in the N/N. 8/2004-C.E., dated 21-1-2004 and 28/2004-C.E., dated 9-7-2004. This court, however, has not made any observation consciously as to the petitioners’ entitlement under the scheme. The competent authority would decide the same. Whether the N/N. 69/2003-C.E., dated 25-8-2003, Annexure-H to the writ petition has been completely eclipsed by the N/N. 8/2004-C.E., dated 21-1-2004, Annexure-I to the writ petition? - Held that: - no relief in terms of the said notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed to the petitioners under the Notification Nos. 32/1999-C.E. and 33/1999-C.E., dated 8-7-1999, in furtherance of which the petitioners have made extensive investments in the specified zone, growth centre or the industrial park. The Union of India by its industrial policy embodied in the office Memorandum dated 24-12-1997, issued by the Ministry of Industry, Department of Industrial Policy and Promotion, Government of India, declared certain incentives for those who would establish industries in the North-Eastern Region, in order to give stimulus to the development of industrial infrastructure. Pursuant thereto, a further notification was issued on 8-7-1999 granting new industrial units which would commence commercial production on or after 24-12-1997 and to the category of industrial units those would increase substantially their installed capacity after that date and cleared goods from the units located in the group centre and integrated infrastructure centres. There is no dispute that the said notifications No. 32/99-C.E. and No. 33/99-C.E., dated 8-7-1999 were issued in exercise of the powers conferred by sub-section (1) of Section 5A of the [Central] Excise Act, 1944 read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incentives. That apart, by enacting Section 80(1B) and 80(1C) of Income-tax, 1961, 100% Income Tax (IT) exemption was provided for the undertakings including those engaged in manufacturing tobacco products, in an Industrial Estate or Industrial Park in the North-East. Those incentives were for the manufacturing units set up after 24-12-1997. 3. The notifications dated 8-7-1999 were amended by the Notification dated 31-12-1999. The amendment which is relevant for this writ petition is as follows : In the said notification, in the opening paragraph, for the words, figures and brackets the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986) , the words, figures and brackets the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (1 of 1986) other than the goods falling under Chapter 24 or Heading No. 21.06 of the said First Schedule or the Second Schedule, as the case may be shall be substituted. 4. The purport of the said notification dated 31-12-1999 was obvious that the exemption of the central excise as accorded was withdrawn in respect of goods falling u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s notification other than cigarettes falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (1 of 1986) shall be substituted. Thus, by the notification dated 22-1-2001, the incentives as declared by the notifications dated 8-7-1999 was sought to be withdrawn only in respect of cigarettes. 5. Be that strange as it may be, by the Notification No. 6/2001-C.E., dated 1-3-2001, the said Central Excise Tariff notifications were sought to be amended in the public interest, in terms of the table below the said notification dated 1-3-2001. For purpose of reference, only the entry in respect of the notifications dated 8-7-1999 are extracted hereunder leaving aside the entries made against serial Nos. 1, 2, 3, 6 7. SL. No. Notification No. and date Amendment (1) (2) (3) 4 32/99-Central Excise, dated the 8th July, 1999 In the said notification, in the first paragraph, for the words, figures and brackets the goods specified in the First Schedule and the Second Schedule to the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal or other authority, any action taken or anything done or purported to have been taken or done under the said notifications, shall be deemed to be and always to have been, for all purposes, as validly and effectively taken or done as if the notifications as amended by this sub-section had been in force at all material times. (2) For the purpose of sub-section (1), the Central Government shall have and shall be deemed to have the power to amend the notifications referred to in the said sub-section with retrospective effect as if the Central Government had the power to amend the said notifications under sub-section (1) of Section 5A of the Central Excise Act read with sub-section (3) of section 3 of the Additional Duties Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), retrospectively at all material times. (3) No suit or other proceedings shall be maintained or continued in any court, tribunal or other authority for any action taken or anything one or omitted to be done, in respect of any goods under the said notifications, and no enforce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 154 of the Finance Act, 2003, has retrospective amended the North-East Central Excise Exemptions notification No. 32/99-C.E., dated 8-7-99, so as to withdraw the benefit of exemption for cigarettes and pan masala containing tobacco gutkha w.e.f. 8-7-99. Such amendments also provides for recovery of amounts, which would not have been refunded out for such amendment, within a period of thirty days from the date on which the Finance Bill, 2003 got assent of the President. It also provides for charging of interest @ 15% in case of delay in such payments. 2. It has been brought to the notice of the Board that, in cases where the amount recoverable has not been paid by the manufacturers within the prescribed period show cause notices have been issued by the Central Excise Commissionerates at Shillong and Dibrugarh. It has also been brought to the notice of the Board that in some cases, orders for recovery of the central excise amounts refunded to the affected units, have also been issued. 3. In this regard, Finance Minister at the consideration stage of the Finance Bill had made the following statement in the Parliament : No industry other than tobacco in the Nort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing conditions : (A) the exemption under this notification shall be available only in respect of a unit which - (i) is located in the State of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland or Tripura; (ii) had commenced commercial production on or after the 24th day of December, 1997, but not later than the 28th day of February, 2001; (iii) had availed of the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated the 8th July, 1999] or No. 33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated the 8th July, 1999]; and (iv) has continued its manufacturing activities after the 28th day of February, 2001; (B) an amount equal to the difference between the sum of basic excise duty, special excise duty and additional excise duty, payable, but for the exemption in this notification, and the sum of basic excise duty, special excise duty and additional excise duty, paid, shall be utilised by the manufacturer only for investment in plant and machinery in a manufacturing unit which is located in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 All goods 8% Nil Nil 3 2404.41 All goods 8% 6% 6% 4 2404.49 All goods 8% 6% 6% 5 2404.59 All goods 8% 6% 6% 6 2404.99 All goods 8% 6% 6% 9. By the subsequent Notification No. 8/2004-C.E., dated 21-1-2004 exemption for the goods falling under sub-heading No. 2401.90, 2402.00, 2404.41, 2404.49, 2404.50 or 2404.99 of the First Schedule to the Central Excise Tariff Act was declared from the whole of the duties of excise and additional duties of excise as leviable under the Central Excise Tariff Act, Additional Duties of Excise (Goods of Special Importance) Act and National Calamity Contingent Duty as leviable under sub-section (1) of Section 136 of the Finance Act subject to the conditions almost similar as provided in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de for the purpose specified in condition (B); (E) if the Committee referred to in condition (D) is satisfied that the investment as specified in condition (B), has been made, it shall issue a certificate to this effect to the manufacturer within a period of three weeks after the expiry of the one month referred to in condition (D), which shall be produced by the manufacturer, within a period of two weeks from the date of issue of such certificate, to the jurisdictional Central Excise Tariff Officer; (F) the investment made under this notification shall not be allowed to be withdrawn before the expiry of ten years from the date on which the investment is made except in a case where the investment withdrawn is reinvested in the same manner as specified in this notification, in any one of the States mentioned in condition (A) : Provided that if the investment made under this notification is withdrawn before the expiry of ten years and is not reinvested as mentioned above, the duty which is equal to the amount so withdrawn and not so reinvested, shall be paid by the manufacturer on the date on which the investment is withdrawn. 10. Apparent, it is that certain restriction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within sixty days of its withdrawal from such account; (D) the manufacturer shall - (i) submit a quarterly statement, within sixty days from the end of the relevant quarter to a Committee consisting of the Chief Commissioner of Central Excise, Shillong, the Principal Secretary of the Department of Industry of the State concerned in which the unit is located and the Principal Secretary in the Department of Industry of the State in which the investment is being made, giving details of deposits made in and withdrawal made from, the escrow account, along with details of investment, made during the quarter; (ii) provide all details relating to the investment made in terms of condition (B), not later than one month after the expiry of the period of two years referred to in condition (C), to the said Committee. (iii) prove to the satisfaction of the said Committee that the investment has been made for the purposes specified in condition (B); (E) if the Committee referred to in condition (D) is satisfied that the investment as specified in condition (B), has been made, it shall issue a certificate to this effect to the manufacturer within a period of one month fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e new industrial policy and other concessions in the North-Eastern Region announced by the office memorandum No. EA/1/2/96-IPD, dated 24-12-1997 (NEIP, 1997) will cease to operate w.e.f. 1-4-2007. Industrial units which have commenced commercial production on or before 31-3-2007 will continue to get benefits/incentives under NEIP, 1997. The benefits as announced are for a period of ten years w.e.f. 1-4-2007. The benefits includes 100% reimbursement on insurance premium, 100% exemption of the excise duty, 100% exemption of income-tax along with capital investment subsidy, interest subsidy, incentive for power generating industries, transport subsidy scheme and all other benefits as available to the IT industry s under Sections 10A and 10AA of the Income-tax Act and under Section 80IC of the Income-tax Act. By the office memorandum No. 10(3)/2007-DBA-II/NER, dated 1-4-2007, formally the benefits of the office memorandum dated 24-12-1997 was discontinued. But by the Notification under No. 11/2007-C.E., dated 1-3-2007, the Government of India has notified as under : NOTIFICAITON No. 11/2007-Central Excise 10 Phalguna, 1928 (Saka) New Delhi, the 1st March, 2007 G.S.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sited by the petitioners after 1-3-2007 with interest @ 18% per annum. The petitioners have further asked for a direction to continue the benefit to the units of the petitioners in terms of the notification dated 21-1-2004, Annexure-I to the writ petition, as culminated and the notification dated 9-7-2004, Annexure-J to the writ petition, for the remaining period of the total period of 10 (ten) years, in terms of the NEIP, 1997 notified by the office memorandum dated 24-12-1997. The petitioners, as the matter of consequential reliefs, have urged for prohibiting the respondents to act in furtherance of the notification dated 1-3-2007. 15. Dr. A.K. Saraf, learned senior counsel appearing for the petitioners has categorically submitted that immediately after Section 151 of the Finance Act, 2003 was enacted, by the Notification No. 69/2003-C.E., dated 25-8-2003, Annexure-H to the writ petition, there was partial restoration of the exemption that was withdrawn and the exemption as proposed thereby was to the extent of 50% of the duty payable, however, subject to certain conditions as laid therein, for the units located in the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed vide the Notification No. 69/2003, dated 25-8-2003 which culminated in the notification dated 21-1-2004 before the expiry of 10 years period. 16. Dr. Saraf, learned senior counsel has categorically submitted that the petitioners had not claimed exemption from the period for which the exemption was retrospectively withdrawn by Section 154 of the Finance Act, 2003 and contended that as such the claims of the petitioners are not in conflict with the ratio as culled out in R.C. Tobacco Private Ltd. and Another v. Union of India and Another inasmuch as the claim of the petitioners as projected in this petition is based on the Notification No. 69/2003-C.E., dated 25-8-2003. Having reference to the impugned notification dated 1-3-2007, Dr. Saraf, learned senior counsel, has contended that the grievance is against the premature withdrawal of the exemption. It is apparent on the face of the submission of Dr. Saraf, learned senior counsel that he has structured his submission on the principle of promissory estoppel. Premature withdrawal has adversely affected the petitioners as they had altered their position by investing a huge amount on the clear and fundamental assurance given by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification was issued in this regard. The State had taken a stand that the appellants would not be entitled to the said exemptions for the period from 1-4-2009 to 18-6-2009 inasmuch as the notification has provided that it would take immediate effect, meaning from the date of its publication, i.e., 18-6-2009. In the background of that case, the Apex Court has observed as under : 12. Even otherwise, it is not altogether a new concession that has been notified by the Excise and Taxation Department in the impugned Notification dated 18-6-2009. As we have noted above, it is an extension of the 2004 Industrial Policy and the resultant tax concession to the eligible units which was available upto 31-3-2009. Therefore, for all purposes, what is notified by the Excise and Taxation Department on 18-6-2009 is an extension of the said concession beyond 31-3-2009 and that is why the notification has used the expression .. for the period ending 31-3-2013 without otherwise indicating the concession already being enjoyed by the eligible units till 31-3-2009. 13. The High Court, with great respect, has gone wrong in not appreciating the background of the case and the decision of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be inequitable to allow him to do so having regard to the positional change that had taken place between the parties, and this would be so irrespective of whether there is pre-existing relationship between the parties or not. The doctrine of promissory estoppel need not be inhibitated by same limitation as of estoppel in the strict sense of term. It is an equitable principle evolved by the courts for doing justice and there is no reason why it should be given only a limited application by way of defence. There is no reason in logic or principle why promissory estoppels should not be available as a cause of action, if necessary to satisfy the equity. The Apex Court has further elicudated the law as under : 19. When we turn to the Indian law on the subject it is heartening to find that in India not only has the doctrine of promissory estoppel been adopted in its fullness but it has been recognized as affording a cause of action to the person to whom the promise is made. The requirement of consideration has not been allowed to stand in the way of enforcement of such promise. The doctrine of promissory estoppel has also been applied against the Government and the defence based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra), summed up the position as follows : Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen. The law may, therefore, now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promises and, in fact, the promise, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promises, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. It is elementary that in a Republic governed by the rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promise and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the Government should be held bound by the promise made by it. When the Government is able to show that in view of the facts as have transpired, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and after this position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies. It would not be enough for the Government just to say that public interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. The Government canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.R. 556. 19. In Pournami Oil Mills and Ors. v. State of Kerala and Anr., reported in 1986 Supp (1) SCC 728 = 1987 (27) E.L.T. 594 (S.C.), the Apex Court has held as under : 7. Under the order dated 11-4-1979, new small-scale units were invited to set up their industries in the State of Kerala and with a view to boosting of industrialisation, exemption from sales tax and purchase tax for a period of five years was extended as a concession and the five-year period was to run from the date of commencement of production. If in response to such an order and in consideration of the concession made available, promoters of any small-scale concern have set up their industries within the State of Kerala, they would certainly be entitled to plead the rule of estoppel in their favour when the State of Kerala purports to act differently. Several decisions of this Court were cited in support of the stand of the appellants that in similar circumstances the plea of estoppel can be and has been applied and the leading authority on this point in the case of M.P. Sugar Mills v. State of U.P. - AIR 1979 SC 621. On the other hand, reliance has been placed on behalf of the State on a judgment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel, there is nothing to show that any misuse was made of these concessions or undue advantage taken of the same. It is true that the preamble to the order dated 12th January, 1977 does recite that the concessions given by the earlier order had given room for many types of misuse but such a recital by itself cannot establish that the concessions were, in fact, misused. If that were so, it was the duty of the Government and the concerned authorities to file a counter-affidavit and place the relevant facts establishing the misuse before the Court. This they have totally failed to do. It is well settled that if the Government wants to resile from a promise or an assurance given by it on the ground that undue advantage was being taken or misuse was being made of the concessions granted the Court may permit the Government to do so but before allowing the Government to resile from the promise or go back on the assurance the Court would have to be satisfied that allegations by the government about misuse being made or undue advantage being taken of the concessions given by it were reasonable well established. In the present case, there is nothing on record to show that any such misuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not persuaded to accept the contention of Mr. Dwivedi that it would be open for the Government to issue a notification in exercise of power under Section 7 of the Bihar Finance Act, which may over-ride the incentive policy itself. In our considered opinion the expression such conditions and restrictions as it may impose in sub-section (3) of Section 7 of the Bihar Finance Act will not authorise the State Government to negate the incentives and benefits which any industrial unit would be otherwise entitled to under the general Policy Resolution itself. In this view of the matter, we see no illegality with the impugned judgment of the High Court in striking down a part of the notification dated 4th of April, 1994. Hence, Dr. Saraf, learned senior counsel has contended that the impugned notification dated 1-3-2007 cannot take away the benefits as available under NEIP, 1997. 23. In State of Jharkhand and Ors. v. Tata Cummins Ltd. and Anr. reported in (2004) 6 SCC 57, the Apex Court has observed as under : 16. Before analyzing the above Policy read with the notifications, it is important to bear in mind the connotation of the word tax . A tax is a payment for raising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has the statute flavour, i.e., the benefit which was extended under Section 49 of the Act of 1948 and the notification had been issued revoking the same benefit under Section 49 of the Act of 1948 by invoking the provisions of the General Clauses Act that an authority granting exemption has a right to revoke the same also. It is true that it has a right to revoke the same but if the other party has suffered on that account then such representation will be against the public policy and the morality. Notification issued under Section 49 of the Act of 1948 for giving the benefit of exemption for the hill areas was in the nature of delegated legislation and not an Act framed by the State Legislature. Therefore, a distinction has to be made between the delegated legislation and the primary legislation framed by the Legislature. 29. In Section 49 there is no specific stipulation that the notification issued under Section 49 of the Act of 1948 can be revoked at any time as was in the case of Shree Durga Oil Mills Anr. - (1998) 1 SCC 572 where Section 6 of the Orissa Sales Tax Act itself provided that the notification is capable of being revoked at any time. Therefore, a distinction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of power has gone up to ₹ 2.50 per unit, are considerations which hardly involve any public interest. They were more of a nature of losses which has been suffered by the Corporation and in order to make these losses, these methods were evolved to reduce and to make good of the losses. Restructuring benefit to 17% of the Tariff 4(A) (demand charges) are the factors which are aimed at to make the losses good for the Corporation. This is not case in which serious public repercussion was involved. These are not the factors which put together can constitute a public interest. Theft of the energy if it was proved by cogent datas that as a result of giving this benefit to the entrepreneurs in the hill areas, they were misusing it or there was theft of the energy at a large scale by these persons to whom the concession had been given then of course such factors, if all the datas were brought on record of course could have persuaded the Court to take a different view of the matter. But simply because there was theft of energy allow the State cannot persuade us to hold that the revocation of such concession can be said to be in public interest. Since the benefit was given to these uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1948 though there was no such provision contained in Section 49 that it will be open to the Corporation to revoke the same but could be possible by invoking the principle of General Clauses Act. But in such delegated legislation such withdrawal could only be permitted if larger public interest is involved or if the Act is passed by legislature. 25. Dr. Saraf, learned senior counsel has contended that there is no element of public interest for issuing impugned notification dated 1-3-2007. Even the respondents did not disclose any public interest and as such, all the benefits which the petitioners were getting or are entitled to, is required to be protected by invoking the principle of promissory estoppel. In order to keep the faith and maintain good governance it is necessary that whatever representation is made by the State which induced the other party to act, the State cannot be permitted to withdraw from that. This is a matter of faith. 26. Dr. Saraf, learned senior counsel appearing for the petitioners has placed his reliance on M/s. Unicorn Industries v. Union of India, reported in 2013 (290) E.L.T. 33 (Sikkim), Shree Sanyeeji Ispat Pvt. Ltd. and Anr. v. State of Assam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy and also its reason and justification so that the court can judge for itself which way the public interest lies and what the equity of the case demands. The court would not act on the mere ipse dixit of the Government, for, the Government cannot be the judge of its own cause and it is the court, which has to, ultimately decide and not the Government whether the Government should be held exempt from liability. The doctrine of promissory estoppel would apply even when the promise would, if acted upon, give rise to a legal relationship in future. The doctrine of promissory estoppel would not be attracted if the promise made by the Government is barred by law. However, when the law does not bar the Government from making the promise, as might have been made by the Government, or when making of the promise itself is not contrary to law, the Government would be required to abide by the promise. The Government has to function as a cohesive body and its different organs or departments have to act in tandem with each other and in harmony with each other on the principles of collective responsibility. The Constitutional Scheme of governance of the Government does not permit the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to say that the promisee ought to have known the position of law that without issuance or publication of the requisite notification under the relevant statute, the promise would not be binding. Even the State cannot be allowed to rely on its lapses in implementing its policy and plead that notification could not be brought out as the industrial policy had lapsed in the meanwhile. In this regard, reliance has been placed on the following passages of State of Bihar and Ors. v. Kalyanpur Cements Ltd., reported in (2010) 3 SCC 274, where it has been enunciated by the Apex Court as under : 4. The Company in order to rehabilitate itself sought the assistance from financial institutions for restructuring package. The Company s proposal for financial assistance and restructuring has been approved by various financial institutions, in principal. However, the same has been made conditional on certain preconditions being met. One of the conditions imposed by the financial institutions was that the restructuring package would be made available only on the Company obtaining a Sales Tax exemption for a period of 5 years from the State Government, in terms of Industrial Policy, 1995. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f we are to accept the submissions of Dr. Dhawan and Mr. Dwivedi that the provisions contained in Clause 24 was mandatory the time of one month for issuing the notification could only have been extended for a reasonable period. It is inconceivable that it could have taken the Government 3 years to issue the follow up notification. We are of the considered opinion that failure of the appellants to issue the necessary notification within a reasonable period of the enforcement of the Industrial Policy, 1995 has rendered the decisions dated 6-1-2001 and 5-3-2001 wholly arbitrary. The appellant cannot be permitted to rely on its own lapses in implementing its policy to defeat the just and valid claim of the Company. For the same reason we are unable to accept the submissions of the learned senior counsel for the appellant that no relief can be granted to the Company as the Policy has lapsed on 31-8-2000. Accepting such a submission would be to put a premium and accord a justification to the wholly arbitrary action of the appellant, in not issuing the notification in accordance with the provisions contained in Clause 24 of the Industrial Policy, 1995. 27. While closing the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Act, 1944. They have further asserted that earlier by the Notification Nos. 32/99-C.E. and 33/99-C.E., dated 8-7-1999 the Central Government had extended certain incentives including exemption of tax and duty for setting up of new industries. But those privileges/benefits were withdrawn by the Notification No. 11/2007-C.E., dated 1-3-2007. Such withdrawal was also based on Government policy. In Para 9 of their counter-affidavit they have asserted that under some circumstances Central Government became compelled to withdraw the benefit/incentives by issuing notification. As per Notification No. 11/2007, dated 1-3-2007 exemption benefit was not allowed on or after 1-3-2007 and this was done in public interest. Withdrawal of any exemption benefit by issuing the notification in the public interest is lawful and within the ambit of the provisions of Central Excise Act, 1944. In Paras 14, 15, 16, 17 and 18 those respondent Nos. 4 and 5 have asserted as under : 14 .as per provisions of Section 5A(4) of Central Excise Act, 1944, every notification issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, in force immediately and shall continue to have the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king a decision of withdrawing the exemptions so granted considering the public interest or on considering other circumstances which might require withdrawal of such benefit. However, they have denied the claim of the petitioners that they undertook substantial expansion by making huge capital investment. In Para 27(iv), those respondents have stated that the Central Govt. issued another notification after issuing the notifications dated 8-7-1999 and that notification being No. 45/99, dated 31-12-1999 under sub-section (1) of Section 5A of Central Excise Act, 1944 read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), by which the Notification No. 32/99-C.E. and the Notification No. 33/99-C.E. both dated 8-7-1999 have been amended w.e.f. 31-12-1999 to the extent that all tobacco related products including pan masala falling under Chapter 24 or Heading No. 21.06 of the First Schedule or the Second Schedule from the purview of exemption granted by the Notification No. 32/99-C.E. and the Notification No. 33/99-C.E. both dated 8-7-1999. In this regard, it may be noted that Heading No. 21.06 relates to pan masala a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 154 of the Finance Act, 2003 and allowed recovery of the amount which was refunded in terms of the exemptions. According to the respondents, on the persistent demand of the industrial units, the notification dated 25-8-2003 was issued granting exemptions to the extent of 50% of Central Excise Duty subject to certain terms and conditions. It has been clearly mentioned in the said notification dated 25-8-2003 that such exemption would only be available to the industrial units which had availed the benefit of exemption under the Notification No. 32/99-C.E., dated 8-7-1999 and the Notification No. 33/99-C.E., dated 8-7-1999 and further that those units continued manufacturing activities on and after 28-2-2001. The respondents in Para 27(x) have asserted that in suppression of the notification dated 25-8-2003 another Notification No. 8/2004, dated 21-1-2004 was issued in the public interest exempting all goods falling under sub-heading No. 2401.90, 2402.00, 2404.41, 2404.49, 2404.50 or 2404.99 of the First Schedule of the Central Excise Tariff Act as stated from whole of the excise duties thereby granting 100% exemption under certain conditions that they have to invest in (i) plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuing demand notice, as the petitioner failed to utilise the amount within the stipulated period; as there is no provision for carry forward the unutilised amount in the subsequent quarter. The answering respondent submits that it is settled provision of law that each notification is to read on its true spirit, the petitioner has no vested right to withhold the amount to be utilised on their suit will and thereby, there is no violation of fundamental rights of the writ petitioner. In the instant case, in hand the writ petitioner on misrepresentation of original fact has approached this Hon ble Court and the writ petition of the writ petitioner is not amenable as writ petition, on this account writ petition of the writ petitioner is deserved to be dismissed in its threshold. The petitioner during the period from 25-8-2003 to 8-7-2004 availed the amount of duty exemption for ₹ 96,61,11,858.00. The writ petitioners were duty bound to produce the investment certificates for the said amount. In fact, the writ petitioners had produced investment certificates only for an amount of ₹ 34 crore. It was the responsibility of the petitioner to voluntarily deposit the unutilised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any judgment, decree, or order of any Court, tribunal or other authority, any action taken or anything done or purported to have been taken or done under the said notifications would be deemed to be and always to have been, for all purposes, as validly and effectively taken or done as if those notifications as amended had been in force at all material times. Sub-section (4) of that section also authorised recovery of all amounts of duty or interest or other charges which have not been collected or refunded but which ought to have been collected and ought not to have been refunded had the new section been enforced at all material times within a period as specified therein. 65. The Ninth Schedule adumbrated in Section 154 so newly inserted withdrew w.e.f. 8-7-1999 from the purview of exemption of payment of excise duty (a) cigarettes falling under Chapter 24 of the First Schedule or the Second Schedule to the Tariff Act and (b) pan masala containing tobacco under subheading Nos. 2106.00 and 2404.49 in the First Schedule or the Second Schedule of the said Act. Further w.e.f. 1-3-2001, the incentives by way of exemption from payment of excise duty was rescinded vis- -vis goods falli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial production tallies with the one as mentioned in the Policy, 1997 with the deadline therefore, i.e., 28-2-2001 being on the eve of 1-3-2001 on and from which the embargo had been imposed by Section 154 of the Finance Act, 2003 read with Schedule 9 thereto. By this notification, the rigour of the denial of the benefit of exemption from payment of excise duty as enjoined by Section 154 of the Finance Act, 2003 read with Schedule 9 was partially relaxed to the extent as embodied therein. Though the notification inter alia reveals that the exempted amount of excise duty would have to be utilised by the manufacturer only for investment in its plants and machineries located in the North-Eastern States and will not be allowed to be withdrawn before the expiry of 10 years, there is nothing decisive therein to indicate that it was in extension of the incentives conceived of and hitherto granted by the Policy, 1997. The Respondents plea that this notification is thus independent of the Policy, 1997 in the narrated background of facts and more particularly in view of Section 154 of the Finance Act, 2003 along with Schedule 9 thereto thus commends for acceptance. The benefit of parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f industries ineligible for benefits thereunder. For ready reference, the same is extracted herein below. (x) Negative List : The following industries will not be eligible for benefits under NEIIPP, 2007 : (i) All goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which pertains to tobacco and manufactured tobacco substitutes. (ii) Pan Masala as covered under Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). (iii) Plastic carry bags of less than 20 microns as specified by Ministry of Environment and Forests Notification No. S.O. 705(E), dated 2-9-1999 and S.O. 698(E), dated 17-6-2003. (iv) Goods falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) produced by petroleum oil or gas refineries. 69. Clause (2) of the Policy, 2007 however provided that the Policy, 1997 would cease to operate on and from 1-4-2007 and the industrial units, which had commenced commercial production on and from 31-3-2007, would continue to receive the benefits/incentives under the earlier Policy. While reserving to the Government the right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing regard to the background that had preceded the Policy, 2007 and the curtailment of the benefits of exemption earlier granted by the Policy, 1997 through various instruments of law in the form of Section 154 of the Finance Act, 2003 read with Schedule 9 thereto as well as the notifications under Section 5A of the Central Excise Act and other related legislations it would be in defiance of logic to conclude that all these notwithstanding, with the specific intention of excluding the industries engaged in the manufacture of goods under Chapter 24 and pan masala under Chapter 21 of the First Schedule to the Tariff Act, 1985, these would still continue to avail the benefits/incentives under the Policy, 1997 only because the units concerned had commenced commercial production on and from 31-3-2007. As it is, the Policy, 2007 has not been assailed by the petitioner and the reliefs sought for by it are wholly founded on the assumption that it has by Clause (2) thereof assured the continuance of the benefits/incentives of exemption from payment of excise duty as promised by the Policy, 1997. As a matter of fact, all its formulations qua the various legal principles highlighted stem from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur Sugar (Kashipar) Ltd. (supra) wherein while affirming the discretion and dominion of the executive to alter its policy in public exigency underscored, the indispensable essentiality of bona fide and good fell as validating imperatives. It marked the constricted contours of judicial review of such matters by extracting its following observations in Nandalal Jaiswal : (1986) 4 SCC 566 (Para - 34). 34 ...We must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call trial and error method and, therefore, its validity cannot be tested on any rigid a priori considerations or on the application of any strait jacked formula. The court must while adjudging the constitutional validity of an executive decision relating to economic matters grant a certain measure of freedom or play in the joints to the executive.... ...Mere errors of Government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void.... The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to other items which do not find mention in the notification. In the present case, there is no ambiguity in the expression used in the G.O. The intention of the State Government is clear that only gold bullion and specie is entitled to the concessional rate of tax. Under the circumstances, the same cannot be extended to the silver as claimed by the assessee. 35. Mr. Dutta, learned counsel has submitted that there is no ambiguity in the said notification. That apart, withdrawal of exemption benefit prematurely is a policy decision of the Government which might appear resiling from the promise, but in the circumstances under which the said policy has been adopted cannot be held unsustainable. 36. What has emerged from the contention and counter contention calling for response from this Court may briefly be formulated as under : (i) Whether the impugned notification dated 1-3-2007, Annexure-L to the writ petition is hit by promissory estoppel by restraining premature withdrawal of the benefits? (ii) Whether the Notification No. 69/2003-C.E., dated 25-8-2003, Annexure-H to the writ petition has been completely eclipsed by the Notification No. 8/2004-C.E., dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken under the provisions of the said Act or any other law for the time being in force, by forfeiture of the amount in the said Escrow Account. The question therefore, is whether the petitioners are entitled to get the benefits in terms of the notification dated 25-8-2003 read with or without notification dated 21-1-2004 for 10 years as promised by the NEIP, 1997, or in other words whether the impugned notification dated 1-3-2007, Annexure-L to the writ petition in respect of premature withdrawal of the benefits is hit by promissory estoppel? 38. To a larger extent, law of promissory estoppel has been crystallised without leaving even a thin penumbra. In the case in hand, the representation or the promise is unequivocal and the petitioners have altered their position acting on such promise or assurance, even though the respondents have averred whether the petitioners have invested huge amount or not is highly questionable but they have not denied that both the units of the petitioners availed the incentive. If incentives were not availed, but they are covered by the notifications dated 25-8-2003 and 21-1-2004 conjointly, they are entitled to get such incentives in the form of exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be inequitable having regard to the dealings which have thus taken place between the parties. These principles were applied in Central London Property Trust Limited v. High Trees House Ltd. (1947) by Denning J. to found the modern doctrine of promissory estoppel. Even Denning, J. was attempting to arrive at a fair solution to the problem to part payment of debt and in doing so the precedent created by Foakes v. Beer (1884), it appears thus, the judicial innovations have taken place in finding fair solution to a dispute so far those relate to applying the doctrine of promissory estoppel and that is the reason why it has been held that whether the doctrine of promissory estoppel would apply or not, it depends on various factual aspects and subject to leeway to the public interest and other conditions such as misuse and garnering undue advantage from the executive promise. In this case also the petitioners have given into the restructured promise and now they have approached this court to enforce their right which according to them is poised against the notification dated 1-3-2007, whereby an inequitable act has been resorted to by the respondents. In this regard, the ratio a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . and Another v. State of Assam and Others, 2006 (2)GLT 397, Pawan Alloys and Casting (P) Ltd. v. U.P.S.E.B, (1997) 7 SCC 251, Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409, State of Punjab v. Nestle India Ltd., (2004) 136 STC 35, Shri Guru Ashis Wire Industries v. State of Gujarat, (1994) 92 STC 286, Pournami Oil Mills v. State of Kerala, 1986 (Supp) SCC 728 and State of Bihar and Another v. Usha Martin Industries Ltd., (1987) 65 STC 430. 41. In addition to the decision as already referred by the learned counsel appearing for the parties, in State of H.P. v. Ganesh Woods Products, reported in AIR 1996 SC 149, the interplay of the doctrine of promissory estoppel and the public interest has been quite lucidly enunciated in the passages extracted hereunder : 54. The doctrine of promissory estoppel is by now well recognised in this country. Even so it should be noticed that it is an evolving doctrine, the contours of which are not yet fully and finally demarcated. It would be instructive to bear in mind what Viscount Hailsham said in Woodhouse Ltd. v. Nigerian Produce Ltd., (1972) A.C. 741 : I desire to add that the time may soon come when the who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution. What does altering the position mean? Does it mean such a change in the position of the promise (as a result of acting on the faith of representation of the promissor) that compensating him in money would not be just and equitable to him, i.e., a situation where the ends of justice and requirements of equity demand that the promissor should not be allowed to go back on his representation and must be held to it or does altering his position mean doing of some act, big or small, which the promisee does acting on the faith of the representation which he would not have done but for the representation? In other words, is it enough that the promisee has spent some money or has taken some step acting on the basis of representation, which can be recompensed in money or otherwise? Is it not ultimately a matter of doing equity and justice between the parties - a case of holding the scales even between the parties and deciding whether in the interests of justice and equity the promissor can be allowed to resile from his promise and compensate the promise appropriately or the promissor ought to be held to his promise and not allowed to go back since such a course is necessary in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formal contract is as good as, if not better than, a mere representation. All that we wish to emphasise is that anything and everything done by the promisee on the faith of the representation does not necessarily amount to altering his position so as to preclude the promissor from resiling from his representation. If the equity demands that the promissor is allowed to resile and the promise is compensated appropriately, that ought to be done. If, however, equity demands, in the light of the things done by the promise on the faith of the representation, that the promissor should be precluded from resiling and that he should be held fast to his representation, that should be done. To repeat, it is a matter of holding the scales even between the parties - to do justice between them. This is the equity implicit in the doctrine. 42. In Bannari Amman Sugars Ltd. v. Commercial Tax Officer and Others reported in (2005) 1 SCC 625, the Apex Court has again restated the law after making reference to development of doctrine of promissory estoppel in India holding that even the beneficiaries are not entitled to opportunity of hearing before prematurely withdrawing the incentives. But the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State to the effect that in the absence of any notification issued under Section 4A of the U.P. Sales Tax Act, the State was entitled to enforce the liability to sales tax imposed on the petitioners thereof under the provisions of the Sales Tax Act and there could be no promissory estoppel against the State so as to inhibit it from formulating and implementing its policy in public interest. 27. The question came up for consideration before this Court in Pournami Oil Mills and Ors. v. State of Kerala and Anr., wherein it was held : (SCC p. 732, Para 7) Under the order dated April 11, 1979, new small scale units were invited to set up their industries in the State of Kerala and with a view to boosting of industrialisation, exemption from sales tax and purchase tax for a period of five years was extended as a concession and the five year period was to run from the date of commencement of production. If in response to such an order and in consideration of the concession made available, promoters of any small scale concern have set up their industries within the State of Kerala, they would certainly be entitled to plead the rule of estoppel in their favour when the State of Ker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verall benefit to the State s economy and the public would be greater if the exemption were allowed. The respondents have passed on the benefit of that exemption by providing various facilities and concessions for the upliftment of the milk producers. This has not been denied. It would, in the circumstances, be inequitable to allow the State Government now to resile from its decision to exempt milk and demand the purchase tax with retrospective effect from 1st April, 1996 so that the respondents cannot in any event re-adjust the expenditure already made. The High Court was also right when it held that the operation of the estoppel would come to an end with the 1987 decision of the Cabinet. Though, there may appear some apparent conflicting edges in the decision of Mahabir Vegetable Oils (P) Ltd. and Another v. State of Haryana and Others and State of Punjab v. Nestle India Ltd. and Another, but a close reading would show that the element of public interest is the ultimate determinant. Even the court may make a comparative assessment of reasons and strike a balance thereof. In this case one important aspect as canvassed by the respondents requires relook. In Para 27(xiv) the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. 705(E), dated the 2nd of September, 1999 and S.O. 698(E), dated the 17th of June, 2003. This proviso has been substituted in place of the first proviso appearing in the Notification No. 32/99-C.E., dated 8-7-1999. According to this court, the reasons as provided in the counter-affidavit in support of such deletion and substitution of the first proviso by the Notification No. 21/2007-C.E., dated 25-4-2007 cannot be brushed aside. Pan masala containing tobacco may cause health hazard as claimed by the respondents. As such, even though the petitioners have not thrown the categorical challenge against the said notification dated 25-4-2007, the said notification will not absolve the respondents from its obligation under the promissory estoppel so far the pan masala without tobacco content is concerned. In view of the saving clause as engrafted in NEIIPP, 2007, as the petitioners units have commenced commercial production on or before 31-12-2007 will continue to get benefits/incentives under NEIP, 1997 in terms of the Notification No. 8/2004-C.E., dated 21-1-2004 subject to the notification dated 25-4-2007. For deposit, the petitioner would get relaxation for purpose of counting ..... 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