2011 (3) TMI 1603 - HC - Central Excise

Summary

Issues:
Challenge to notifications affecting excise duty exemption on tobacco products and pan masala; Interpretation of Policy, 2007; Application of Section 154 of the Finance Act, 2003; Promissory estoppel and legitimate expectation doctrines.

Analysis:
1. The petitioner challenged notifications withdrawing excise duty exemption on tobacco products and pan masala under Policy, 1997. The Court dismissed the challenge citing Section 154 of the Finance Act, 2003, which recalled exemptions retrospectively. The Court upheld the withdrawal based on public interest and the power of the Ministry to modify policies.

2. The petitioner argued for the applicability of Policy, 2007, claiming entitlement to exemptions despite being on the negative list. The Court rejected this argument, stating that the negative list rendered the petitioner ineligible for benefits. The Court emphasized that Policy, 2007 was not challenged, leading to the dismissal of claims based on promissory estoppel and legitimate expectation.

3. The review applicant contended that Section 154 did not apply to pan masala without tobacco, highlighting a mistake in the judgment. The Court acknowledged the error and recognized that the provision did not affect pan masala without tobacco. This clarification narrowed the debate to the interpretation of Policy, 2007 regarding pan masala without tobacco.

4. The Court reiterated that pan masala without tobacco fell under the negative list of Policy, 2007, thus not eligible for exemptions. The judgment upheld the impugned notification aligning with the policy intent. The Court rejected claims based on Section 38A, promissory estoppel, and legitimate expectation due to the unchallenged Policy, 2007.

5. Ultimately, the Court recalled the judgment's conclusions related to pan masala without tobacco, sustaining other aspects of the decision. The review petition was rejected, emphasizing the alignment with Policy, 2007 and the ineligibility of pan masala without tobacco for exemptions.