1989 (12) TMI 63 - HC - Customs

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Customs Notification No. 216/88.
2. Validity of the Desk Officer's letter as an industrial licence.
3. Applicability of the principle of promissory estoppel.
4. Alleged discrimination by Customs authorities.
5. Compliance with procedural requirements under the Industries (Development and Regulation) Act, 1951.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional Rate of Duty under Customs Notification No. 216/88:
The petitioner sought a Writ of Mandamus directing the respondents to allow the clearance of imported Jumbo Rolls of Graphic Art Film and Photographic Colour Paper at a concessional duty rate of 60% as per Customs Notification No. 216/88, dated 7th July, 1988. The notification stipulated that the importer must hold an industrial licence for slitting and confectioning of photo-sensitised materials from jumbo rolls. The court held that the petitioner did not possess the required industrial licence and therefore was not entitled to the concessional duty rate.

2. Validity of the Desk Officer's Letter as an Industrial Licence:
The petitioner argued that a letter dated 3rd June 1987 from a Desk Officer in the Ministry of Industry, which permitted the petitioner to carry on business with Small Scale Registration until a regular C.O.B. licence was issued, should be considered as an industrial licence. The court rejected this argument, stating that the letter explicitly mentioned the pending status of the application for a C.O.B. licence and did not constitute an industrial licence as required by the Customs notification. The letter did not meet the formal requirements of a licence under the Industries (Development and Regulation) Act, 1951, and was not in Form F as prescribed by Rule 15(4) of the Registration and Licensing of Industrial Undertaking Rules.

3. Applicability of the Principle of Promissory Estoppel:
The petitioner contended that the principle of promissory estoppel should apply, arguing that the Ministry's letter constituted a promise that was acted upon by the petitioner. The court found no basis for promissory estoppel, noting that the letter only permitted the petitioner to carry on business with Small Scale Registration and did not promise the issuance of an industrial licence. The court emphasized that the letter allowed clearance of goods as per prescribed rules, which did not include concessional duty rates.

4. Alleged Discrimination by Customs Authorities:
The petitioner claimed that the Customs authorities had granted concessional rates to other manufacturers in similar situations without an industrial licence, alleging discrimination. The court dismissed this claim, stating that there was no evidence to support it. The court held that even if such permissions were granted, they would constitute violations of the law, and the petitioner could not demand similar illegal treatment. The principle of equality before the law does not extend to equality in illegal actions.

5. Compliance with Procedural Requirements under the Industries (Development and Regulation) Act, 1951:
The court examined the procedural requirements for obtaining an industrial licence under the Industries (Development and Regulation) Act, 1951, and the related rules. The petitioner's application for a C.O.B. licence was pending, and the Ministry had not issued a licence for Graphic Art Film. The court rejected the petitioner's argument that the Ministry's inaction should be deemed as granting the licence, stating that there was no legal provision for such a presumption. The court noted that the Ministry had expressly granted a licence for Photographic Colour Paper but not for Graphic Art Film, indicating the rejection of the application for the latter.

Conclusion:
The court dismissed the writ petition, concluding that the petitioner did not hold the required industrial licence under the Act and was not entitled to the concessional duty rates specified in the Customs notification. The court also directed the Union Government to take action against any officials who violated the provisions of the law. The petitioner was ordered to pay the costs of the proceedings.