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TMI Blog1994 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Revenue, No. 145-Customs, dated 27th July 1978, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts polyvinyl chloride resins, falling within Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) when imported into India, from the whole of the duty of Customs leviable therein which is specified in the said First Schedule. This Notification shall be in force upto and inclusive of 31st March 1981." 3.Before the expiry of the time fixed in the Notification i.e. 31-3-1981, the withdrawal Notification bearing No. 205 dated 16-10-1980 was issued which reads as follows :- "New Delhithe 16th Oct., 1980 24th Asvina 1902 (SAKA) NOTIFICATION CUSTOMS G.S.R. - In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the Notification of the Government of India in the Ministry of Finance, Department of Revenue No. 66-Customs, dated the 15th March 1979, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts polyvinyl chloride resins, falling within Chapter 39 of the First Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... governmental or public capacity, as distinct from its executive or commercial capacity, its action is not bona fide or is actuated by extraneous considerations, the courts will not allow a party to invoke the doctrine of promissory estoppel against the Government. It is submitted that the Notification No. 66 of 1979 had been superseded in the public interest for good and valid reasons and the judgment of the High Court did not call for any interference. 6.The Customs Act, 1962 consolidates and amends the law relating to customs spread over in the Sea Customs Act, 1878, the Land Customs Act, 1924 and the Indian Aircraft Act, 1934. The Act which came into force on February 1, 1963 seeks to codify the entire law relating to sea, land, and air customs into a single comprehensive measure. Customs duties or tarrifs are legal duties levied on the transit of goods from one country to another. They are both the source of revenue to the State as well as regulatory measures to protect and promote indigenous industries and trade. The Customs Tariff Act, 1975, was enacted by the Parliament, with a view to consolidating and amending the law relating to customs duties as complimentary to the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) necessary in the public interest so to do, it may, by special order in each case, exempt from the payment of duty, under circumstances of an exceptional nature to be stated in such order, any goods on which duty is leviable." 9.The power to grant exemption from duty, wholly or in part, on the plain language of Section 25 (supra) is contingent upon the satisfaction of the Government that it would be in `public interest' to do so. Thus, `public interest' is the guiding criteria for exercising the power under Section 25 (supra). 10.Having noticed the background and the relevant provisions as also the two Notifications, it shall now be appropriate to refer in brief to the facts of the cases before us. For the sake of convenience, we shall refer to the facts of the case as appearing in the Paper Book of Kasinka Trading & Ors. v. Union of India & Ors. [C.A. No. 43336/93]. The appellants are importers of PVC resins which at the relevant time were chargeable to basic customs duty under Tariff Entry No. 39.01/06 of the Customs Tariff Act, 1975 read with Customs Act, 1962. In addition to it, the import of PVC resins is also chargeable to auxiliary duty, additional duty and special duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l established in the administrative law of the country. To put it simply, the doctrine represents a principle evolved by equity to avoid injustice. The basis of the doctrine is that where any party has by his word or conduct made to the other party an unequivocal promise or representation by word or conduct, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing as well as intending that the representation, assurance of the promise would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings, which have taken place or are intended to take place between the parties. 13.It has been settled by this Court that the doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority "t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmendra Trading Co. & Ors. - 1988 (3) SCC 570; Amrit Banaspati Co. Ltd. & Anr. v. State of Punjab & Anr. - 1992 (59) E.L.T. 13 (SC) = 1992 (2) SCC 411; and Union of India & Ors. v. Hindustan Development Corporation & Ors. - 1993 (3) JT SC 15. In Godfrey Philips India Ltd. (supra) this Court opined :- "We may also point 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 of representation made by it, the Court would not raise an equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or Public authority. The doctrine of promissory estoppel would be displaced in such a case, becasuse on the facts, equity would not require that the Government or Public authority should be bound by the promise or representation made by it." In Excise Commissioner U.P., Allahabad etc. etc. v. Ram Kumar etc. etc. [AIR 1976 SC 2237] four learned Judges of this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be altered much more quickly and easily than can Acts of Parliament." We have pointed out hereinbefore the necessity of constant and continuous monitoring of the nation's economy by the Government (and its various institutions) and the relevance of these enactments as a means of ensuring a proper and healthy growth." The learned Judge went on to opine :- "The Parliament has appointed two authorities i.e., Central Government and the Board to make rules/regulations to carry out the purposes of the Act generally. The character of Rules and of the Regulations made under Sections 156 and 157 respectively is the same - both constitute delegated legislation. The Regulations are subject to an additional limitation viz., they should not be contrary to the Rules made under Section 156. The purpose of sub-section (2) in both the sections is inter alia to allocate certain matters to each of them exclusively; subject to these sub-sections, both the delegatees can exercise the power vested in them for carrying out the purposes of the Act. No established legislative practice of any considerable duration has been brought to our notice to read any further limitation into the regulation-making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is apparent that the exemption Notification issued under Section 25(1) of the Act, in "public interest", was designed to off set the excess price which the local enterpreneurs were required to pay for importing PVC resin at a time when the difference between the indigenous product and the imported product was substantial. No importer could be expected to import PVC resins after paying duty and incur losses. The exemption Notification, was therefore, issued with a view to off set those losses to the extent possible. The exemption Notification was not issued as a potential source of extra profit for the importer. Again, at the time when the Notification was withdrawn by the Government there was no scope for any loss to be suffered by the importers as was clearly stated in the counter filed by the Union of India and which contention has remained unrebutted. From the counter filed by the Union of India in the High Court it is abundantly clear that the necessity for the continuation of the exemption, in view of the changed circumstances, was no longer necessary. The exemption Notification did not hold out to the appellants any enforceable promise. 19.The facts of the appeals before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself as is obvious from the language of Section 25 of the Act. 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. From the very nature of power of exemption granted to the Government under Section 25 of the Act, it follows that the same is with a view to enabling the Government to regulate, control and promote the industries and industrial production in the country. Notification No. 66 of 1979 in our opinion, was not designed or issued to induce the appellants to import PVC resin. Admittedly, the said Notification was not even intended as an incentive for import. The Notification on the plain language of it was conceived and issued on the Central Government "being satisfied that it is necessary in the public interest so to do." Strictly speaking, therefore, the Notification cannot be said to have extended any "representation" much less a "promise" to a party getting the benefit of it to enable it to invoke the doctrine of promissory estoppel against the State. It would bear repetition that in order to invoke the doctrine of promissory estoppel, it is necessary that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expiry of that date would amount to prohibiting the Government from discharging its statutory obligation under Section 25(1) of the Act, if it was satisfied that it was in the "public interest" to withdraw, modify or rescind the earlier Notification. The plain language of Section 25 of the Act is indicative of the position that it is the public interest and public interest alone which is the dominant factor. It is not the case of the appellants that the withdrawal of Notification 66/79 by the impugned Notification was not in `public interest'. Their case, however, is that relying upon the earlier Notifications they had acted and the Government should not be permitted to go back on its assurance as otherwise they would be put to huge loss. The courts have to balance the equities between the parties and indeed the courts would bind the Government by its promise "to prevent manifest injustice or fraud." The following observations from Malhotra & Sons v. Union of India [AIR 1976 J & K 41] have been noticed with approval by this Court in Excise Commissioner v. Ram Kumar [AIR 1976 SC 2237] and in M.P. Sugar Mills case (supra) :- "The courts will only bind the Government by its promise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic interest" till after 31st March 1981 if the Government is satisfied as to the change in the circumstances before that date. Since, the Government in the instant case was satisfied that the very public interest which had demanded a total exemption from payment of customs duty now demanded that the exemption should be withdrawn it was free to act in the manner it did. It would bear a notice that though Notification 66/79 was initially valid only upto 31-3-1979 but that date was extended in "public interest", we see no reason why it could not be curtailed in public interest. Individual interest must yield in favour of societal interest. 24In our considered opinion therefore the High. Court was perfectly right in holding that the doctrine of promissory estoppel had no application to the impugned notification issued by the Central Government in exercise of its powers under Section 25(1) of the Act in view of the facts and circumstances, as established on the record. 25.So far as the second batch of cases is concerned the facts of C.A. Nos. 4333-34/83 need be noticed. These two appeals have been filed against the judgment and order dated 3rd March 1983 of the High Court of Delhi. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the fact situation is not controvertible but in the absence of any material placed before the High Court or even in this appeal to establish that the Notification dated 29-8-1980 was issued for any oblique or extraneous consideration and was not "in public interest", it is not possible to find fault with that notification for the reasons we have already given while dealing with the first batch of cases. The appellants, who are in business, have to be prepared for tides in the business. In Poornami Oil Mills (supra), it was the incentive to set up new industry in the State with a view to boost the industrialisation that exemption had been granted and it was in that fact situation that the doctrine of promissory estoppel was held available to the appellant therein. Again in Bakul Oil Industries (supra) it was the incentive to set up industries in a conforming area that the exemption had been granted and the Court held that the Government could withdraw an exemption granted by it earlier only if such withdrawal could be made without offending the rule of promissory estoppel and without depriving an industry entitled to claim exemption for the entire specified period for which exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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