1996 (4) TMI 135 - HC - Central Excise

Summary

Issues: Challenge to Notification No. 223/87 and violation of Article 14 of the Constitution of India.

Analysis:
The petitioner, a Private Company engaged in the manufacture and sale of aerated waters, challenged Notification No. 223/87, dated 22-9-1987, seeking its quashing or alleging contravention with Notification No. 175/86, dated 1-3-1986. The petitioner, a small scale industry, enjoyed concessions under various Central and State enactments, including exemption from excise duty on specified goods. However, the withdrawal of these concessions through the impugned notification led to a cascading effect of excise duties on raw materials, affecting the final product's cost. The petitioner, using the trade name of another company for manufacturing, faced the withdrawal of benefits under the new notification, prompting the challenge on the grounds of promissory estoppel and violation of Article 14 of the Constitution of India.

The respondent contended that the withdrawal of concessions did not amount to promissory estoppel against the Government as it was merely a concession and not a promise. Additionally, the respondent argued that there was no violation of Article 14 as the withdrawal affected all entities within the same class uniformly. Citing precedents from other High Courts, the respondent emphasized that similar challenges based on promissory estoppel had been dismissed previously. The High Court, aligning with its previous judgments, held that no promissory estoppel was applicable in this case and that there was no violation of Article 14. Consequently, the petition was dismissed, and any security deposit was ordered to be refunded to the petitioner, with no costs imposed.

In conclusion, the High Court rejected the petitioner's challenge to Notification No. 223/87, ruling out the application of promissory estoppel and finding no infringement of Article 14 of the Constitution of India. The judgment highlighted that the withdrawal of concessions did not create a binding promise on the Government and did not discriminate unfairly among entities in the same class. The decision emphasized consistency with prior rulings on similar matters, reinforcing the dismissal of the petition and the refund of any security deposit to the petitioner without imposing costs.