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Issues Involved:
1. Application of Promissory Estoppel to Government Notifications. 2. Determination of Duty Rate on Imported Goods Cleared for Home Consumption. Issue-wise Detailed Analysis: 1. Application of Promissory Estoppel to Government Notifications The primary issue revolves around whether the principle of promissory estoppel applies to a notification issued by the Government under Section 25(1) of the Customs Act. The petitioners argued that they acted based on the earlier notifications (Annexures-2/B and 2/C) which provided a lower duty rate, and thus the Government is estopped from enforcing the higher duty rate introduced by the notification dated 28-11-1986 (Annexure-2/A). The petitioners contended that the goods imported prior to the new notification should be subject to the duty rates prevalent at the time of import. The court examined the nature of the notification under Section 25(1) of the Customs Act, determining whether it is legislative or executive in nature. The court referred to several landmark cases on promissory estoppel, including M.P. Sugar Mills v. State of Uttar Pradesh and Others and Union of India v. Godfrey Philips India Ltd., which affirmed that promissory estoppel applies against the Government in its executive functions but not in legislative functions. The court concluded that the principle of promissory estoppel is applicable against the Government in the exercise of its governmental, public, or executive functions. Consequently, the Government is bound by the earlier notifications (Annexures-2/B and 2/C) for goods imported before 28-11-1986, and the higher duty rate under Annexure-2/A cannot be enforced for those goods. 2. Determination of Duty Rate on Imported Goods Cleared for Home Consumption The second issue concerns whether the imported goods, having been cleared for home consumption before the new notification was issued, lose their identity as "imported goods" and thus should not be subject to the higher duty rate under the new notification. The petitioners argued that the goods had already been cleared for home consumption under Section 47 of the Customs Act before the new notification and thus should not be subjected to the new duty rate. The court analyzed the relevant provisions of the Customs Act, including Sections 2(25), 12, 15, 25, and 68. It emphasized that goods cleared for home consumption are no longer considered "imported goods" under Section 2(25). Additionally, Section 49 allows for storage of such goods in a warehouse without deeming them as warehoused goods for the purposes of the Act, meaning Chapter IX, including Section 68, does not apply. The court found that the petitioners had indeed cleared the goods for home consumption before the new notification, as evidenced by the lack of a counter-affidavit from the opposite parties. Therefore, the goods in question were not subject to the higher duty rate under the new notification dated 28-11-1986. Conclusion The court quashed the demands under Annexures-1/A, 1/B, and 1/C, ruling that the goods imported by the petitioners before the notification dated 28-11-1986 are subject to the duty rates under the earlier notifications (Annexures-2/B and 2/C). The court directed the refund of any payments made by the petitioners pursuant to the interim orders and the Joint Memorandum. The writ application was allowed, and the petitioners were granted relief from the higher duty demands.
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