1986 (3) TMI 86 - HC - Central Excise

Summary

Issues Involved:
1. Interpretation of the period of concession under Notification No. 268/82.
2. Authority of the government to rescind the concession during the stipulated period.
3. Applicability of the doctrine of promissory estoppel.
4. Impact of subsequent Notification No. 88/84 on the petitioner's rights.
5. Alleged acquiescence by the petitioner.

Detailed Analysis:

1. Interpretation of the Period of Concession:
The primary issue revolves around the interpretation of the period of concession granted under Notification No. 268/82. The petitioner argued that the concession is for a period of seven years from the date of the first clearance of tyres, which in this case is from 25-1-1984. The court agreed, stating that the concession is indeed time-bound and irrevocable during the said period. The court emphasized that the plain meaning of the Notification indicates that the exemption is for a period certain, specifically seven years from the date of the first clearance of tyres from any factory.

2. Authority to Rescind the Concession:
The court examined whether the government has the authority to rescind the concession during the stipulated period of seven years. It was held that while the government generally has the power to rescind concessions, this power is limited by the doctrine of promissory estoppel. The court cited the Supreme Court's decision in Union of India v. Godfrey Philips India Ltd., which established that the government is bound by promissory estoppel in cases where a party has relied on a government representation to its detriment.

3. Doctrine of Promissory Estoppel:
The petitioner relied on the doctrine of promissory estoppel, arguing that the government cannot rescind the concession as it had already acted upon the representation made in Notification No. 268/82. The court upheld this argument, noting that the petitioner had applied for an industrial license and made a public issue of capital based on the assurance of the excise duty concession. The court reiterated that the rule of promissory estoppel is applicable against the government and that the petitioner is entitled to the concession for the full period of seven years.

4. Impact of Subsequent Notification No. 88/84:
The petitioner claimed that Notification No. 88/84, which made slight changes to the original concession, did not negate the entitlement under Notification No. 268/82. The court found that Notification No. 88/84 actually provided additional benefits to the petitioner, allowing for excise duty exemption not only on the initial capital investment but also on additional investments made up to 31-3-1984. Thus, the subsequent notification did not adversely affect the petitioner's rights under the original notification.

5. Alleged Acquiescence by the Petitioner:
The respondents argued that the petitioner had acquiesced to the changes made by Notification No. 88/84 by not challenging it. The court rejected this argument, stating that the petitioner had not acquiesced but had instead benefited from the additional advantages provided by the subsequent notification. The court concluded that the plea of acquiescence could not be sustained as the petitioner continued to be entitled to the original concession under the doctrine of promissory estoppel.

Conclusion:
The court ruled in favor of the petitioner, holding that the concession granted under Notification No. 268/82 is for a period of seven years from the date of the first clearance of tyres. The government is bound by promissory estoppel and cannot rescind the concession during this period. The subsequent Notification No. 88/84 did not negate the petitioner's rights but rather provided additional benefits. The plea of acquiescence by the petitioner was also rejected. The rule nisi issued was made absolute, with no order as to costs.