1999 (1) TMI 44 - HC - Customs

Summary

Issues Involved:
1. Validity of the direction prohibiting transmission of electricity.
2. Validity of the show cause notice under Section 124 of the Customs Act, 1962.
3. Applicability of Customs Notification No. 13/81-Cus. to the case.
4. Compliance with the conditions of the letter of intent and statutory provisions.
5. Application of principles of promissory estoppel and equitable estoppel.
6. Maintainability of the writ petition in the presence of an alternative remedy.
7. Financial condition of the petitioners and the requirement of pre-deposit under Section 129E of the Act.

Detailed Analysis:

1. Validity of the Direction Prohibiting Transmission of Electricity:
The direction issued by the Assistant Collector of Central Excise and Customs, Cuttack, prohibiting the transmission of electricity by ICCL to IMFA was challenged. The petitioners argued that this direction was an attempt to circumvent the orders passed by the Apex Court, which had allowed the transmission of surplus power to the OSEB grid.

2. Validity of the Show Cause Notice:
The show cause notice issued under Section 124 of the Customs Act, 1962, was challenged on the grounds that it was vague and did not specify which conditions of Notification No. 13/81-Cus. were violated. The petitioners contended that the notice was issued with mala fide intent and an oblique motive to get over the orders of the Apex Court.

3. Applicability of Customs Notification No. 13/81-Cus.:
The core dispute revolved around whether the benefit of Customs Notification No. 13/81-Cus., dated 9-2-1981, for the import of Captive Power Plant machineries and equipment was applicable to ICCL. The petitioners argued that the notification applied to their case, as confirmed by the Apex Court's orders.

4. Compliance with Conditions of the Letter of Intent and Statutory Provisions:
The petitioners claimed compliance with the conditions of the letter of intent and statutory provisions, including the orders of the Apex Court. They argued that the Customs Department's actions were contrary to the principles of promissory estoppel and equitable estoppel.

5. Application of Principles of Promissory Estoppel and Equitable Estoppel:
The petitioners contended that the Customs Department was aware of the arrangement for feeding surplus power into the OSEB grid and had allowed it. Therefore, the Department was bound by the principles of promissory estoppel, equitable estoppel, and estoppel by conduct, and could not now allege a violation of the terms and conditions of Notification No. 13/81-Cus.

6. Maintainability of the Writ Petition in Presence of Alternative Remedy:
The respondents argued that the writ petition was not maintainable as an effective, efficacious, and statutory alternative remedy was available. The petitioners countered that the validity of the show cause notice itself was under challenge and that the existence of an alternative remedy should not bar the writ petition. The court acknowledged that while alternative remedies should generally be pursued, exceptional circumstances could justify the exercise of writ jurisdiction.

7. Financial Condition and Requirement of Pre-deposit under Section 129E:
The petitioners highlighted their precarious financial condition, arguing that they would not be able to comply with the pre-deposit requirement under Section 129E of the Act, which mandates the deposit of duty demanded or penalty levied pending appeal. The court noted the petitioners' financial difficulties and directed the Tribunal to entertain the appeal without insisting on pre-deposit, while keeping the Captive Power Plant under attachment of the Customs Department until the appeal's disposal.

Conclusion:
The court concluded that the petitioners should avail the statutory remedy of appeal and directed the Tribunal to entertain the appeal without insisting on pre-deposit due to the petitioners' precarious financial condition. The writ petition was disposed of with these directions and observations, emphasizing that the decision was made in the peculiar background of the case and should not be considered a precedent.