1985 (11) TMI 129 - AT - Income Tax

Summary

Issues Involved:
1. Levy of additional duty of customs (Countervailing Duty or C.V.D.) on imported viscose rayon staple fibre.
2. Application of the principle of promissory estoppel.
3. Interpretation and applicability of Section 15 of the Customs Act.
4. Validity and effect of amending Notification No. 208/79.

Detailed Analysis:

1. Levy of Additional Duty of Customs (C.V.D.) on Imported Viscose Rayon Staple Fibre:
The appellants imported viscose rayon staple fibre and were assessed to C.V.D. at the rate of Rs. 2.37 per kg as per Notification No. 208/79. They claimed a refund of the duty in excess of Rs. 1.32 per kg, the rate specified in Notification No. 8/79 prior to its amendment. This claim was rejected by the Assistant Collector and upheld by the Appellate Collector of Customs, Calcutta.

2. Application of the Principle of Promissory Estoppel:
Miss Anjali Bahl, representing the appellants, argued that the principle of promissory estoppel should apply, asserting that the concessional rate of Rs. 1.32 per kg should be deemed in force until 31-12-1979. She cited the Supreme Court's judgment in Union of India and Others v. Godfrey Philips India Ltd. and Others, which overruled the earlier decision in Jeet Ram Shivkumar v. State of Haryana. However, the respondent's counsel, Shri Tripathi, contended that no estoppel could be pleaded against a statute, referencing several High Court judgments including Fenoplast Pvt. Ltd. v. Union of India and Hindustan Spinning and Weaving Mills v. Union of India, which rejected the application of promissory estoppel in similar circumstances.

3. Interpretation and Applicability of Section 15 of the Customs Act:
Shri Tripathi emphasized that Section 15 of the Customs Act mandates that the rate of duty applicable to imported goods is the rate in force on the date the Bill of Entry is presented. Since the Bill of Entry in this case was presented after the issuance of Notification No. 208/79, the applicable rate was Rs. 2.37 per kg. The Tribunal agreed with this interpretation, noting that it could not pass an order contrary to this specific provision of law.

4. Validity and Effect of Amending Notification No. 208/79:
The Tribunal examined whether the amending Notification No. 208/79, which modified the concessional rate of C.V.D., was valid. It concluded that the notification was issued in the public interest under Section 25 of the Customs Act and could not be challenged on the grounds of promissory estoppel. The Tribunal noted that the appellants did not demonstrate any specific representation or assurance from the Government that would justify applying the earlier rate of Rs. 1.32 per kg. The Tribunal also highlighted that the issue of an exemption notification is a legislative function and cannot be subject to promissory estoppel.

Conclusion:
The Tribunal found no merit in the appellants' plea of promissory estoppel and confirmed the order of the Appellate Collector. The additional duty of customs was correctly levied at the rate prescribed by the amended notification, and the appeal was rejected.