1981 (4) TMI 107 - HC - Customs

Summary

Issues:
1. Determination of eligibility for cash subsidy on the export of "absorbent cotton uncarded" under a specific scheme.
2. Interpretation of the term "absorbent cotton wool" in relation to the product "absorbent cotton uncarded."
3. Application of the doctrine of promissory estoppel in the context of export benefits assurance by the Government.
4. Consideration of the binding nature of a judgment by a Single Judge in a subsequent case before the same court.

Analysis:
1. The petitioners, a limited liability company, exported "absorbent cotton uncarded" to Japan and sought a cash subsidy of 15% of the F.O.B. value under a scheme. The respondents rejected the claim stating that cash assistance was not admissible for "absorbent cotton uncarded." The petitioners contended that their product fell under the category of "absorbent cotton wool" based on past practices and official classifications. The petition sought a direction to grant the cash compensatory support as per their application.

2. The Court considered historical practices and official classifications to determine the eligibility of "absorbent cotton uncarded" for the cash subsidy scheme. It was noted that prior to 1973, the product was considered under "absorbent cotton wool." The Classification Committee classified it as such, and cash assistance was provided accordingly until the scheme's withdrawal in 1977. The petitioners argued for the application of promissory estoppel due to the Government's assurance of entitlement to the scheme's benefits.

3. The respondents contended that "absorbent cotton uncarded" did not qualify as "absorbent cotton wool." However, the Court held that the issue had been settled by a prior judgment of Shri Justice Shah, which was binding unless reconsidered by a Larger Bench. The Court upheld the petitioners' entitlement to the cash subsidy based on the previous judgment and principles of judicial practice.

4. The Court directed the respondents to compute and pay the cash compensatory support to the petitioners at a rate of 15% of the F.O.B. value within three months. The petition was allowed, the rule made absolute, and costs awarded to the petitioners. The judgment highlighted the importance of respecting previous judicial decisions and the binding nature of judgments by Single Judges unless referred to a Larger Bench for reconsideration.