TMI Blog2019 (9) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the case of the appellant, who were manufacturing certain products, requiring PVC resin as one of the raw materials for its manufacturing process. By Notification No. 66 dated 15.03.1979 issued under Section 25 of the Customs Act, 1962 which is pari materia with Section 5A of the Central Excise Act, the PVC resin was exempted from basic import duty. The exemption was to be effective till 31.03.1981. However, by Notification No. 205 dated 16.10.1980 issued under Section 25 of the Customs Act, the exemption granted earlier came to be withdrawn. This Court has clearly held that the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to see all aspects including the objective to be achieved and the public good at large. It has been held that while considering the applicability of the doctrine, the courts have to do equity and the fundamental principle of equity must forever be present in the mind of the Court while considering the applicability of the doctrine. It has been held that the doctrine of promissory estoppel must yield when the equity so demands and when it can be shown having regard to the facts and circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 ) Civil Appeal No. 2345 of 2017 and Civil Appeal No. 2346 of 2017 - - - Dated:- 19-9-2019 - JUSTICE ARUN MISHRA, JUSTICE M. R. SHAH And JUSTICE B. R. GAVAI JUDGMENT B. R. Gavai, J. Leave granted in S.L.P.(C) No. 36926 of 2012. 2. The question of law that arises for consideration in these appeals is, as to whether, by invoking the doctrine of promissory estoppel, can the Union of India be estopped from withdrawing the exemption from payment of Excise Duty in respect of certain products, which exemption is granted by an earlier notification; when the Union of India finds that such a withdrawal is necessary in the public interest. 3. Since the factual position as well as the question of law arising in the present three appeals are common, they are heard together and disposed of by this common judgment. The appellant, Union of India, in exercise of powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1994) (hereinafter referred to as the Central Excise Act ) read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition (C) No. 36926 of 2012, approached the High Court of Sikkim by way of Writ Petition (C) No. 22 of 2007. The High Court of Sikkim vide its judgment and order dated 11.05.2012 allowed the writ petition and held that the petitioner therein was entitled to exemption from payment of excise duty on the manufacture of pan masala from its unit situated in the State of Sikkim for a period of 10 years from the date of commencement of the commercial production, i.e., 27.06.2006. 5. Similarly, the respondent in Civil Appeal No. 2346 of 2017, namely, M/s Dharampal Satyapal Ltd., which was a manufacturer of pan masala with tobacco and other tobacco products, approached the Gauhati High Court by way of a petition bearing No. PW(C) 749 of 2010. The said petition was with regard to withdrawal of exemption in respect of pan masala with tobacco. The Single Judge of the Gauhati High Court vide judgment and order dated 10.12.2010 found no substance in the petition and as such dismissed the petition. Being aggrieved thereby, the said respondent filed Writ Appeal No. 81 of 2011 before the Appellate Bench of Gauhati High Court. Vide the judgment and order dated 20.04.2016, the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees. It is submitted that, though the Union of India had specifically contended before both the High Courts that the 2007 Notifications were issued in the public interest, the same has not been considered. It is submitted that the Union of India, in exercise of its delegated powers, is always empowered to modify and withdraw the exemptions granted by it under the earlier notification(s). It is submitted that the Union of India, taking into consideration the public interest, that the consumption of pan masala with tobacco or pan masala without tobacco is hazardous to the human health and, therefore, for curbing its consumption, had issued the 2007 Notifications thereby including pan masala in Chapter 21 and all products contained in Chapter 24, i.e., tobacco and manufactured tobacco substitutes, in the negative list. It is submitted that, after taking into consideration that the 2007 Notification was issued in public interest, the Sikkim High Court ought not to have interfered with it. He further submitted that the reasoning given by the Sikkim High Court that pan masala is not hazardous and, therefore, the 2007 Notification cannot be said to be in the public interest is totally err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearing on behalf of the respondents, have supported the impugned judgments and orders. It is submitted that, the Sikkim High Court as well as the Appellate Benches of the Gauhati High Court have rightly relied upon the doctrine of promissory estoppel and allowed the appeals. It is submitted that, it is only on account of the representation given by the Union of India and the State Governments that the industries established in the notified areas of Sikkim as well as Assam would be entitled for 100% exemption from central excise, the writ petitioners before the High Court had established the industries in such remote areas. It is submitted that, the exemption notifications were issued in view of the industrial policy of the Union of India as well as the State Governments that on account of backwardness in these areas, the industrialisation in these areas should be promoted so that the economic development takes place. It is submitted that, only on the assurance of the Central as well as the State Governments, the writ petitioners have invested huge amount and, as such, now the Union of India could not be permitted in law to resile from the assurance given by them to the writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic authority to make . There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. It could thus be seen that, it has been held by this Court that an exemption notification does not make the items which are subject to levy of customs duty etc. as items not leviable to such duty. It only suspends the levy and collection of customs duty etc. subject to such conditions as may be laid down in the public interest . It has further been held that, such an exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. It has been held that the supersession or revocation of an exemption notification in the public interest is an exercise of the statutory power by the State under the law itself. It has further been held that under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. 16. This Court, after considering the objections that the exemption could not be withdrawn prior to the date prescribed in the notification granting exemption has observed thus: 23. The appellants appear to be under the impression that even if, in the altered market conditions the continuance of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in severe resource crunch. On reconsideration of the financial position, it was decided to limit the scope of the earlier exemption notifications issued under Section 6 of the Orissa Sales Tax Act. Because of this new perception of the economic scenario of the State, the scope of the earlier notifications had to be restricted. They were first abrogated altogether on 20-5-1977. Thereafter, it was decided to grant exemption at a limited scale. 24. In our opinion, the plea of change of policy trade on the basis of resource crunch should have been sufficient for dismissing the respondent's case based on the doctrine of promissory estoppel. Public interest demanded modification of the earlier IPR. 19. It could thus be seen that, it has been held that when withdrawal of the exemption is in public interest, the public interest must override any consideration of private loss or gain. In the said case, the change in policy and withdrawal of the exemption on the ground of severe resource crunch have been found to be a valid ground and to be in public interest. 20. A similar issue came up for consideration before the Bench consisting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt was considering the question with regard to validity of the notification which withdrew 33.33% of the hill development rebate, on the total amount of electricity bill, granted under the earlier notification. This Court while considering the similar challenge observed thus: 33. Normally, the doctrine of promissory estoppel is being applied against the Government and defence based on executive necessity would not be accepted by the court. However, if it can be shown by the Government that having regard to the facts as they have subsequently 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 promisee and enforce the promise against the Government. Where public interest warrants, the principles of promissory estoppel cannot be invoked. The Government can change the policy in public interest. However, it is well settled that taking cue from this doctrine, the authority cannot be compelled to do something which is not allowed by law or prohibited by law. There is no promissory estoppel against the settled proposition of law. Doctrine of promissory estoppel cannot be invoked for en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir in the Division of Toxicology and Cancer Risk Factors, German Cancer Research Centre (DKFZ), Heidelberg, Germany. The research paper is titled as Alert for an epidemic of oral cancer due to use of the betel quid substitutes gutkha and pan masala: a review of agents and causative mechanisms Mutagenesis Vol. 19 No. 4 . After considering the entire material in detail and considering the various earlier studies, the paper observes thus: Perspectives Banning of gutkha and pan masala has been strongly advocated by oncologists as a preventive measure to reduce oral cavity cancers. Recently, a number of States in India have banned the manufacture and sale of both products and this should reduce the incidence rate. Similar regulations regarding other health-impairing tobacco products which have been on the market for centuries, together with cigarettes and bidis (an indigenous smoking product), should also be reinforced. However, for those who are addicted to these products or are already affected by premalignant lesions, educational interventions to encourage stopping the habit are essential. Additionally, chemopreventive interven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enic mixtures that can cause oral cancer. Additionally, these products are addictive and enhance the early appearance of OSF, especially so in young users who could be more susceptible to the disease. Although recently some curbs have been put on the manufacture and sale of these products, urgent action needs be taken to permanently ban gutkha and pan masala, together with the other well-established oral cancercausing tobacco products. Finally, as the consequences of these habits are significant and likely to intensify in the future, an emphasis on education aimed at reducing or eliminating the use of these products as well as home-made preparations should be accelerated. 27. Recently, the Department of Oral Medicines and Radiology, Dental Institute, Rajendra Institute of Medical Sciences, Ranchi has through its experts, namely, Anjani Kumar Shukla, Tanya Khaitan, Prashant Gupta and Shantala R. Naik conducted a study on the subject Smokeless Tobacco and Its Adverse Effects on Hematological Parameters: A Cross-Sectional Study Advances in Preventive Medicine 2019 . The study paper considered the consumption of smokeless tobacco (SLT) in various forms in India su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as the money spent on marketing, and advertising is many times of the revenue generated from the sale of PM. In Mumbai after the ban on PM and gutka the sale has come down and the percentage of users quitting and reducing the habit was 23.53% and 55.88% respectively. The main reason of quitting and reduction in consumption was non availability of these products. In spite of the ban gutka was still available but in different forms or at increased cost. Strict law in the form of Cigarettes and other Tobacco Products Act 2003 has been made in India, but the enforcement and compliance is lax. There is a need for strong enforcement and compliance of laws throughout the country. The genotoxic, carcinogenic properties and numerous other harmful effects of PM need immediate and strict action by the government on PM without tobacco as it has banned PM with tobacco. The consumers should also be made aware of the harmful effects of PM as they are under a false impression that it is not harmful. Conclusion Pan masala is widely used across all the strata of society and is freely available in many parts of the country. It is carcinogenic, genotoxic, and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the public interest. 32. The Sikkim High Court has observed that the appellant herein has been unable to establish any overriding public interest, which would make the doctrine of promissory estoppel inapplicable. It has further observed that, the pan masala has not been declared as hazardous to health by any notification or order of the Government of India or the State Government. It found that, no material or scientific report had been placed on record to demonstrate that the pan masala is a health hazard. We find that the reasoning arrived at by the Sikkim High Court is totally erroneous. 33. Insofar as the Gauhati High Court is concerned, the learned Single Judge by an elaborate reasoning had found that the notifications impugned before it was in the public interest and further observed that in view of the overriding public interest, the doctrine of promissory estoppel could not be invoked. Not only that, but the learned Single Judge in the judgment has specifically observed thus: Having regard to the background that had preceded the Policy 2007 and the curtailment of the benefits of exemption earlier granted by the Policy 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of pan masala with tobacco is not in the public interest. The legislative policy as reflected in Section 154 of the Finance Act was to withdraw the exemption granted to the manufacturers of cigarettes as well as pan masala with tobacco and that too with retrospective effect. Apart from the fact that, it is a common knowledge that tobacco is highly hazardous, the legislative intent was also unambiguous. In these circumstances, the finding of the High Court that the withdrawal of exemption for tobacco products was not in the public interest, to say the least is shocking. We find that the approach of the Appellate Bench of the High Court was totally unsustainable. 36. As already discussed hereinabove, we have no hesitation to hold that the withdrawal of the exemption to the pan masala with tobacco and pan masala sans tobacco is in the larger public interest. As such, the doctrine of promissory estoppel could not have been invoked in the present matter. The State could not be compelled to continue the exemption, though it was satisfied that it was not in the public interest to do so. The larger public interest would outweigh an individual loss, if any. In that vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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