TMI Blog2023 (5) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... o account all the relevant factors while issuing the impugned notifications reducing the exemption to 25% for the aforesaid period and failed to discharge its statutory obligation while issuing the impugned notifications. Justifications offered, to say the least, is far too naive to be accepted. In Bannari Amman Sugars Ltd. [ 2004 (11) TMI 320 - SUPREME COURT ], the court held that there is no vested right as to tax-holding is acquired by a person who is granted concession. If any concession has been given it can be withdrawn at any time and no time-limit should be insisted upon before it was withdrawn. This court also held that promissory estoppel can be invoked only if on the basis of representation made by the Government, the industry was established to avail benefit of exemption. The decision in Mahabir Vegetable Oils (P) Ltd. v. State of Haryana [ 2006 (3) TMI 234 - SUPREME COURT ] is along the same lines as MRF Ltd. [ 2006 (9) TMI 278 - SUPREME COURT] , which is that benefits once granted, cannot be divested by a retrospective statute or notification. These decisions, in this court s opinion stand on a different footing, because they primarily concern exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70,000 copies per hour to High Speed Coldset Web Offset Rotary Double Width Four Plate Wide Printing Machine with a minimum speed of 70,000 copies per hour . 3. On 09.02.2004, the assessee filed a Bill of Entry claiming the benefit of a 5% concession (under the First Notification). However, owing to the Amended Notification, the assessee was ineligible for the benefit of the previously enjoyed concession, under the First Notification, and was liable to pay customs duty at 39.2% on the value of the Imported Machine amounting to 1,92,54,318. Assesee filed a writ ₹ before the High Court Writ Petition No 298/ 2004 for declaring the Amended Notification ultra vires Section 25(1) of the Customs Act 1962 (hereafter, the Act ) and thus sought, a declaration for withdrawal of the Amended Notification. On 18.03.2004, a single judge made an interim order Order dated 18.03.2004 in WP No 298/ 2004 directing the release of the imported machinery provisionally on payment of a concessional rate of duty against the bank guarantee for the differential amount of ₹1,67,98,410. 4. On December 5, 2005, a single judge bench By order dated 5 December, 2005 in WP No 298/ 2004 set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers of the government to issue a notification under Section 25(1) of the Act which may have serious implications on their exercise of power in future. The ASG further submitted that the assessee cannot claim concessions/exemptions in respect of a commodity as a matter of right as the same falls within the policy domain of the government. 9. Learned counsel further submitted that the commodities granted exemption under the amended notification relate to technological advancement and modernization of the industrial sector in the country and thus the element of public interest is ingrained in the amended notification. 10. The learned ASG also placed reliance on section 21 of the General Clauses Act, 1897 to argue that the Union s power to issue a notification includes the power to withdraw the same. Section 21 of the General Clauses Act, 1897 reads as: 21. Power to issue, to include power to add to, amend, vary or rescind notifications, orders, rules, or bye-laws .- Where, by any (Central Act) or Regulations, a power to ( issue notifications) orders, rules, or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power to grant exemption from payment of the customs duty under section 25(1) of the Act is not a delegated power to tax but a power expressly conferred under the Act and thus principles of administrative law will be applicable. 14. Learned counsel for the assessee also placed reliance on Dai-ichi Karkaria Limited v. Union of India Ors., (hereafter, Dai-ichi Karkaria ) [(2000) 4 SCC 57] and MRF Ltd. v. Commissioner of Sales Tax (hereafter, MRF Ltd. ) (2006) Supp 6 SCR 417 to argue that in the present case, while amending the First Notification, the government failed to discharge its burden of establishing before the court as to what public interest existed that necessitated government to reduce the extent of exemption and how the withdrawal/amendment of the First Notification is in furtherance of public interest . In the present case, the Union failed to justify the public interest in confining the concessional rate of duty to rotary printing machines of double width four plate variety and not extending the same to rotary printing machines of the single width two plate variety despite both the machines having minimum speed of 70,000 copies per hour. It was furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and market conditions and upon being satisfied that the first notification required amendment issued the second notification amending the description of the goods in respect of which the exemption was to be prospectively allowed as a matter of fiscal policy. It is submitted that the tax research unit duly assessed the priorities in the matter of grant of exemption and accordingly the second notification was issued. Serial No. 267A of notification No.21/2002-Customs was amended vide Notification No.164/2002-Customs was amended vide notification no.164/2003- Customs dated 11th November, 2003 so as to restrict the benefit of customs duty concession available for specified printing machinery only to 'high speed cold set web offset rotary double width four plate printing machines with a minimum speed of 70,000 copies per hour'. This amendment was done as a matter of fiscal policy taking into account several representations from domestic manufacturers of printing machines seeking reconsideration of the earlier concession. The intention as a matter of policy was to restrict the concessional customs duty of 5% with nil CVD and Nil SAD only to those highspeed cold offset printing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genous angle therefore was not germane to withdrawal of exemption and this being the position element of public interest which must govern in the case of grant or withdrawal of the grant is lost. There could hardly remain any distinction between the two types of machines as both were having the same technology. No reasonable differentiation could be made between the two types of machines as both the machines have the same capacity of production and both were to be imported and were not manufactured in the country. Therefore, to our mind the Hon'ble Trial Judge did not commit any illegality in holding that element of public interest could not be perceived in withdrawal of exemption. 20. The assessee is, in the opinion of this court, correct in asserting that every action of the executive government, including exercise of its power to grant or withdraw tax exemption, should be suffused with public interest. In Indian Express Newspapers (Supra), this court, speaking in the context of a customs withdrawal notification [challenged on the ground of violation of the right to freedom of speech under Article 19 (1) (a)] stated that: 18. In cases where the power vested in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and observed that: [..] The withdrawal of exemption in public interest is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the public interest . The courts, do not interfere with the fiscal policy where the Government acts in public interest and neither any fraud or lack of bona fides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interest while issuing or modifying or withdrawing an exemption notification under Section 25(1) of the Act. It needs no emphasis that the power of exemption under Section 25(1) of the Act has been granted to the Government by the Legislature with a view to enabling it to regulate, control and promote the industries and industrial productions in the country. Where the Government on the basis of the material available before it, bona fide, is satisfied that the public interest would be served by either granting exemption or by withdrawing, modifying or rescinding an exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is that benefits once granted, cannot be divested by a retrospective statute or notification. These decisions, in this court s opinion stand on a different footing, because they primarily concern exercise of statutory power, i.e. withdrawal, in a manner that has an extremely prejudicial or unreasonable impact, which is retrospective in effect. 26. So far as the question of promissory estoppel is concerned, a recent decision of this court, in Prashanti Medical Services Research Foundation v. Union of India (2019) 9 SCR 828 placed the matter in correct perspective, when it observed that: 26. [..] a plea of promissory estoppel is not available to an assessee against the exercise of legislative power and nor any vested right accrues to an assessee in the matter of grant of any tax concession to him. In other words, neither the appellant nor the assessee has any right to set up a plea of promissory estoppel against the exercise of legislative power such as the one exercised while inserting sub-section (7) in Section 35-AC of the Act (see Motilal Padampat Sugar Mills Co. Ltd. [Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409] and other cases relied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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