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TMI Blog2010 (11) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... at the benefits conferred vide notification dated 9.9.2003 are extended and benefits conferred under Office Memorandum dated 1.4.2007 are given similar effect as that of notification dated 9.9.2003 and the same shall be curtailed in the manner which is not known to law whether the Government is empowered, invoking the right to reserve, to modify the provisions under notification dated 9.9.2003 and Office Memorandum dated 1.4.2007 as contended by Mr. A. Moulik, learned Senior Counsel appearing for the respondents/ revenue - Once it is established that the respective Governments are giving the impugned duty exemption in public interest, the same cannot, at any stretch, be withdrawn unless there is a larger public interest involved - It is a settled law that an authority exercising delegated legislation cannot read in the provision granting powers of delegated legislation something more than what such provision in fact provides - to deny the benefits statutorily conferred upon the petitioners/assessees in the public interest, pursuant to the New Industrial Policy of the Central and State Governments, reducing the percentage of such statutory concessions, suffers from elements of arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) If the Central Government is satisfied that it is necessary in the public so to do, it may, by special order in each case, exempt from payment of duty of excise, under circumstances of an exceptional nature to be stated in such order, any excisable goods on which duty of excise is leviable. (2A) The Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2) insert an explanation in such notification or order, as the case may be, by notification in the Official Gazette at any time within one year of issue the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be. (3) An exemption under sub-section (1) or sub-section (2) in respect of any excisable goods from any part of the duty of excise leviable thereon (the duty of excise leviable thereon being hereinafter referred to as the statutory duty) may be granted by providing for the levy of a duty on such goods at a rate expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same reads as hereunder: - 2.2.2 "9th September, 2003 Notification No. 71/2003-Central Excise In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than goods specified in Annexure - I appended hereto, and cleared from a unit located in the Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area, as the case may be, in the State of Sikkim, specified in Annexure - II appended hereto, from so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid during the month under consideration, other than by way of utilisation of CENVAT credit under the CENVAT Credit Rules, 2002, in his account current, maintained in terms of Part V of the Excise Manual of Supplementary Instruction issued by the Central Board of Excise and Customs. Such amount credited in the account current may be utilised by the manufacturer for payment of duty in the manner specified under rule 8 of the Central Excise Rules, 2002, in subsequent months, and such payment shall be deemed to be paid in cash: Provided that where the exemption contained in this notification is not applicable to some of the goods produced by a manufacturer, the amount of such credit shall not exceed the amount of duty paid less the amount of the CENVAT Credit availed of, in respect of the duty paid on the inputs used in or in relation to the manufacture of goods cleared under this notification. (b) the credit of duty paid during the month under consideration, other than by way of utilisation of CENVAT credit under the CENVAT Credit Rules, 2002, may be taken by the manufacturer in his account current, by the 7th day of the month following the month under consideration. (c) a manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty on clearances of excisable goods, the said goods shall be considered to have been cleared without payment of duty to the extent of utilisation of such irregular or excess credit. Explanation.-For the purposes of this notification, duty paid, by utilisation of the amount credited in the account current, shall be taken as payment of duty by way other than utilisation of CENVAT credit under the CENVAT Credit Rules, 2002. 5. The exemption contained in this notification shall apply only to the following kinds of units namely:- (i) new industrial units which have commenced commercial production on or after the 23rd day of December, 2002, but not later than the 31st day of March, 2007; (ii) Industrial units existing before the 23rd day of December, 2002, but which have undertaken substantial expansion by way of increase in installed capacity by not less than twenty-five per cent on or after the 23rd day of December, 2002, but have commenced commercial production from such expanded capacity, not later than the 31st day of March, 2007. 6. The exemption contained in this notification shall apply to any of the said units for a period not exceeding ten years from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f fixed capital investment in plant and machinery for the purpose of expansion of capacity/modernization and diversification', as against an increase by 33½ % which was prescribed in NEIP, 1997. (v) Excise Duty Exemption: 100% Excise Duty exemption will be continued, on finished products made in the North Eastern Region, as was available under NEIP, 1997. However, in cases, where the CENVAT paid on the raw materials and intermediate products going into the production of finished products (other than the products which are otherwise exempt or subject to nil rate of duty) is higher than the excise duties payable on the finished products, ways and means to refund such overflow of CENVAT credit will be separately notified by the Ministry of Finance. (vi) Income-tax Exemption: 100% Income-tax exemption will continue under NEIIPP, 2007 as was available under NEIP, 1997. (vii) Capital Investment Subsidy: Capital Investment Subsidy will be enhanced from 15% of the investment in plant and machinery to 30% and the limit for automatic approval of subsidy at this rate will be Rs.1.5 crores per unit, as against Rs.30 lakhs as was available under NEIP, 1997. Such subsidy will b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old-age homes ; (iii) Vocational training institutes such as institutes for hotel management, catering and food crafts, entrepreneurship development, nursing and paramedical, civil aviation related training, fashion, design and industrial training. A number of tax concessions under the existing provisions of sections 10A and 10AA of the Income-tax Act are already available to the IT sector. However, one of the important impediments to the development of Software Technology Parks or IT related SEZs in the North Eastern Region is the non-availability of trained human resources in the North Eastern Region. Accordingly, tax benefits as is availed under section 80-IC of the Income-tax Act would be extended to IT related training centers and IT hardware units. II. Incentives for Bio-technology industry: The biotechnology industry will be eligible for benefits under NEIIPP, 2007 as applicable to other industries. III. Incentives for Power Generating Industries: Power Generating plants will continue to get incentives as governed by the provisions of section 81A of the Income-tax Act. In addition, power generating plants up to 10 MW based on both conventional and non-conventional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. (N.N. Prasad) Joint Secretary to the Government of India" 3.1. Concededly, sub-section (1) of section 5A of the Central Excise Act, 1944 empowers the Central Government to issue notification to exempt generally either with or without conditions, excisable goods as may be specified, from the whole or any part of the duty of excise, provided the Central Government is satisfied that it is necessary in the public interest to grant such exemption. The proviso, thereunder, lays down an embargo in relation to goods produced or manufactured in free trade zone and states that unless specifically exempted by such notification, in lieu of the expressed words used in the proviso, no exemption therein shall apply to excisable goods which are produced or manufactured - (i) in a free trade zone or a special economic zone and brought to any other place in India; or (ii) by a hundred per cent, export-oriented undertaking and brought to any other place in India. Explanation : In this proviso, "free trade zone", "special economic zone" and "hundred per cent export-oriented undertaking" shall have the same meanings as in Explanation 2 to sub-section (1) of section 3. 3.2. Further, statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17-2-2003 exercising its power under Article 162 of the Constitution of India, which reads as hereunder: "DEPARTMENT OF COMMERCE AND INDUSTRIES, GOVERNMENT OF SIKKIM No. G.O./2/DI/2002-2003/901 Dated : 17/02/03 NOTIFICATION The Notification/Memorandum issued by Ministry of Commerce and Industry, Department of Industrial Policy and Promotion, Govt. of India vide No. 14(2)/2002-SPS, dated 23rd December 2002 approving a special package of incentives for development of Industries in the State of Sikkim, is hereby reproduced for general information of the public and the entrepreneurs as under: No. 14(2)/2002-SPS Government of India, Ministry of Commerce and Industry, (Department of Industrial Policy and Promotion) New Delhi. Dated 23rd Dec. 2002. OFFICE MEMORANDUM Subject : New Industrial Policy and other concessions for the State of Sikkim. The Government of Sikkim has requested for a special package for development of industries in the State on the lines for the North East Industrial Policy notified by the Central Government vide Ministry of Industry's OM No. EA/1/2/96-IPD, dated 24th December 1997. Discussions on Strategy and Action Plan for Development of Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsion, as defined. 3.2. Development of Industrial Infrastructure: (i) The funding pattern under the Growth Centre Scheme currently envisaging a Central assistance of Rs.10 crore for each centre is raised to Rs.15 crore per centre. (ii) The financing pattern of Integrated Infrastructure Development Centers (IIDC) between Government of India and SIDBI will change from 2:3 to 4:1, and the GOI funds would be in the nature of a grant, so as to provide the required infrastructural support. 3.3. The above concessions/subsidies shall be available to all new units and to the existing industrial units on their substantial expansion as defined, in the industrial areas notified by the Central Government (Annexure-I) and Thrust Industries (Annexure-II) irrespective of location. 3.4. Ineligible Industries under the policy: Tobacco and tobacco products including cigarettes/cigars/gutka, etc., Aerated branded beverages, and Pollution causing paper and paper products. 3.5. Nodal Agency North Eastern Development Finance Corporation Limited (NEDFI) would be designated as the Nodal Agency for routing the subsidies/incentives under various schemes notified under this Policy. Explanation: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as substantial expansion of existing units specifically provides for 100% income tax and excise duty exemption for a period of 10 years from the date of commencement of the commercial production. 7. It is not in dispute that based on the above statutory guarantee for the exemption of the excise duty referred to above, the petitioners/assessees invested their money and started new units or expanded their existing units. 8.1 But, surprisingly, the respondents/revenue by notifications dated 27-3-2008 and 10-6-2008, substituted the paragraphs 2, 3 and 4 of the earlier notification dated 9-9-2003, which provide 100% income tax and excise duty exemption. As a result of such modification the said 100% exemption of income tax and excise duty was reduced. 8.2.1 The notifications dated 27.3.2008 and 10.6.2008 read as hereunder: "GOVERNMENT OF INDIA, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) New Delhi, the 27th March, 2008. NOTIFICATION No. 23/2008-Central Excise 8.2.2 G.S.R. (E).- In exercise of the powers conferred by sub section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re eligible for exemption under this notification, the exemption contained in this notification shall be subject to the condition that the manufacturer first utilizes whole of the CENVAT credit available to him on the last day of the month under consideration for payment of duty on goods cleared during such month and pays only the balance amount in cash. 2B The exemption contained in this notification shall be given effect to in the following manner, namely:- (a) the manufacturer shall submit a statement of the total duty paid and that paid by utilization of CENVAT credit, on each category of goods specified in the said Table and cleared under this notification, to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 7th of the next month in which the duty has been paid; (b) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification as may be deemed necessary, shall refund the duty payable on value addition, computed in the manner as specified in paragraph 2 to the manufacturer by the 15th of the month following the one in which the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturer fails to comply with the provisions of clauses (a) to (e), he shall forfeit the option, to take credit of the amount calculated in the manner specified in sub-paragraph 2 in his account current on his own, as provided for in clauses (a) to (c); (g) the amount of the credit availed irregularly or availed of in excess of the amount determined correctly refundable under clause (e) and not reversed by the manufacturer within the period specified therein, shall be recoverable as if it is a recovery of duty of excise erroneously refunded. In case such irregular or excess credit is utilised for payment of excise duty on clearances of excisable goods, the said goods shall be considered to have been cleared without payment of duty to the extent of utilisation of such irregular or excess credit. Explanation.-For the purposes of this paragraph, duty paid by utilisation of the amount credited in the account current, shall be taken as payment of duty by way other than utilisation of CENVAT credit under the CENVAT Credit Rules, 2004. 3. (1) Notwithstanding anything contained in paragraph 2, the manufacturer shall have the option not to avail the rates specified in the said Table and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule of the Central Excise Tariff Act, 1985 (5 of 1986) as in corresponding entry in column (2) of the said Table, and on finalization of the special rate, necessary adjustments be made in the subsequent refunds admissible to the manufacturer in the month following the fixation of such special rate. (4) Where the Central Government considers it necessary so to do, it may- (a) revoke the special rate or amount of refund as determined under sub-paragraph (2) by the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, or (b) direct the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, to withdraw the rate so fixed. Explanation: For the purpose of this paragraph, the actual value addition in respect of said goods shall be calculated on the basis of the financial records of the preceding financial year, taking into account the following: (i) Sale value of the said goods excluding excise duty, Value Added Tax and other indirect taxes, if any, paid on the goods; (ii) Less: Cost of raw materials and packing material consumed in the said goods; (iii) Less: Cost of fuel consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 71/2003-Central Excise, dated the 9th September, 2003 which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 717(E), dated the 9th September, 2003 namely:- In the said notification,- (i) in paragraph 2,- (a) after the words, brackets and figure "corresponding entry in column (2) of the said Table,", the words, brackets and figure "when manufactured starting from inputs specified in the corresponding entry in column (5) of the said Table in the same factory," shall be inserted; (b) for the Table, the following Table shall be substituted, namely:- TABLE Sl. No. Chapter of the First Schedule Description of goods Rate Description of inputs for manufacture of goods in column (3) (1) (2) (3) (4) (5) 1. 29 All goods 29 Any goods 2. 30 All goods 56 Any goods 3. 33 All goods 56 Any goods 4. 34 All goods 38 Any goods 5. 38 All goods 34 Any goods 6. 39 All goods 26 Any goods 7. 40 Ty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so that a manufacturer that commences commercial production on or after the 1 day of April, 2008 may file an application in writing to the Commissioner of Central Excise or the Commissioner of Customs and Central Excise, as the case may be, for the fixation of a special rate not later than the 30 day of September of the financial year subsequent to the year in which it commences production. (1A) Nothing contained in sub-paragraph (1) shall apply to a unit manufacturing goods falling under Serial No. 12, 13, 14 or 15 of the Table." (b) in sub-paragraph (2), for the words "six months", the words "three months" shall be substituted; (c) for sub-paragraph (5), the following sub-paragraph shall be substituted, namely:- "(5). The manufacturer shall be entitled to refund at the special rate fixed under sub-paragraph (2) in respect of all clearances of excisable goods manufactured and cleared under this notification with effect from the 1st day of April of the year in which the application referred to at sub-paragraph (1) was filed with the Commissioner of Central Excise or Commissioner of Central Excise and Customs, as the case may be: Provided that in cases where the application r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.3 Hence, the petitioners/assessees have challenged the said notifications dated 27.3.2008 and 10.6.2008 in the above batch of writ petitions. 9. Heard Mr. A. K. Upapdhyaya, learned Senior Counsel, Mr. Paresh M. Dave and Mr. Sudesh Joshi, learned Counsel appearing for the petitioners/assessees and Mr. A. Moulik, learned Senior Counsel appearing for the respondents/revenue. 10. On behalf of the petitioners/assesseees, it is contended that the impugned notifications modifying the exemption of excise duty is - (i) without jurisdiction; (ii) contrary to the spirit and object of the New Industrial Policy of the Central and the State Government; (iii) arbitrary and unreasonable; (iv) exceeds the power conferred under section 5A of the Act; and (v) opposed to the principles of promissory estoppel. 11.1. Per contra, Mr. A. Moulik, learned Senior Counsel appearing for the respondents/revenue contends that - (i) by impugned notifications dated 27.3.2008 and 10.6.2008, the respondents/revenue have not proposed to withdraw any exemption but proposed only to ensure that the exemption benefit reaches the actual manufacturers so that there shall not be any misuse or abuse of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise dated 27.3.2008 and Notification No. 37/2008-Central Excise dated 10.6.2008 in withdrawing the exemption granted in the payment of duty for utilization towards the CENVAT credit/cash conferred upon the petitioners/assessees by Notification No. 71/2003-Centrtal Excise dated 9.9.2003, namely, General Exemption No. 51B and Office Memorandum dated 1.4.2007 in File No. 10(3)/2007-DBA-II/NER, both issued by the Government of India exercising the powers conferred under section 5A of the Central Excise Act, 1944? 14. The settled law is that fiscal statues should be strictly construed. But it does not rule out the application of the principle of reasonable construction to give effect to the purpose or intention of any particular provision, as apparent from the scheme of the Act, or with the assistance of external aids, as are permissible under law. In order to apply the principle of reasonable construction to give effect to the purpose or intention of the provision, as apparent from the scheme of the Act, the Court must ensure to harmonize different provisions in the same Act and prefer an interpretation which would lead to harmonized construction rather than to lead to inconsistenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature. The language employed in a statute is the emanative factor of legislative intent. The object of interpreting a statute is to ascertain the intention of the Legislature enacting it. The intention of the Legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. 16. In the instant cases, both the Cabinets of the Central and the State Governments had taken an Industrial Policy Resolution (IPR) decision by exercising the powers conferred under Articles 73 and 162 of the Constitution of India respectively for industrial development and economic development of the country. The respective Governments having thus taken a policy decision, namely, the IPR to achieve the objects, referred to above, by notifications dated 23.12.2002 and 17.2.2003 and pursuant to that Policy, conferred certain benefits, namely, the exemption of duty invoking the statutory power under section 5A of the Central Excise Act, 1944. Such policy decision as well as exercise of powers conferred upon the respective Governments in order to achieve their objects ought to be given due effect to. This is ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are giving the impugned duty exemption in public interest, the same cannot, at any stretch, be withdrawn unless there is a larger public interest involved. Such an attempt to withdraw the exemption, relying on which, the petitioners have acted upon the New Industrial Policy, would not only be illogical but also irrational. 18.4 No doubt, the power to grant includes the power to cancel or modify but the same should be based on reasons and not arbitrarily. 18.5 It is true that the Government has the right to modify any part of the policy in public interest as per clause 4 of the notification dated 17.2.2003 exercising the power of the State under Article 162 of the Constitution of India, which reads as hereunder: "4. Government reserves the right to modify any part of the policy in public interest." 18.6 Similarly as per clause 3 of the Office Memorandum dated 1.4.2007 of the Central Government exercising the power of the Central Government under Article 73 of the Constitution of India, the Government reserves its right to modify any part of the policy in public interest, which reads as hereunder: "3. Government reserves the right to modify any part of the Policy in public int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountenanced. 20. It is a settled law that an authority exercising delegated legislation cannot read in the provision granting powers of delegated legislation something more than what such provision in fact provides. In other words, a delegate of powers of delegated legislation cannot exercise such powers, even by attempting to read intent, in excess of the powers granted by the provisions. Therefore, the respondents having granted exemption as a New Industrial Policy of the State in the public interest so to do are not entitled to curtail such exemption in purported exercise of power under section 5A of the Act itself by trying to read into an object, which actually did not exceed, when such was not the object of the Legislature itself. Unless there are materials to substantiate there arises a superior public interest or larger public interest. 21. The power reserved by the Government namely, the Government reserves the right to modify any part of the policy in public interest, therefore, may, in general, be correct and work out only where such superior or larger public interest warrants to do so. When such a contention arises, the Court is under obligation to examine as to wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which only peripheral activities like preservation during storage, cleaning operations, packing, re-packing, labelling or relabelling, sorting, alteration of retail sale price etc. take place." 23.3 Paragraph 2 of the Office Memorandum dated 1.4.2007 makes it clear that exemption granted in earlier Office Memorandum dated 24.12.1997 will cease to operate with effect from 1.4.2007. The Industrial Units which started on or before 31.3.2007 will continue to get the benefits and incentives under the North East Industrial Policy (NEIP), 1997. The same reads as hereunder: - "2. The 'New Industrial Policy and other concession in the North Eastern Region' announced vide O.M. No. EA/1/2/96-IPD, dated 24.12.1997 (NEIP, 1997) will cease to operate with effect from 1.4.2007. Industrial Units which have commenced commercial production on or before 31.3.2007 will continue to get benefits/incentives under NEIP, 1997." 23.4 Of course, by Office Memorandum dated 1.4.2007, also the Government reserves the right to modify any part of the Policy in public interest and the same is subject to the test of larger/superior public interest as discussed above. 24. In a similar situation bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumed or implied. It is also a trite that the principle that fiscal statutes should be strictly construed does not rule out the application of the principle of reasonable construction to give effect to the purpose or intention of any particular provision as apparent from the scheme of the Act, with the assistance of such external aids, as are permissible under law [SHREE SAJJAN MILLS LTD. v. COMMISSIONER OF INCOME TAX, M.P. BHOPAL, 1986 TAX LAW REPORTER 48]. 19.2. In order to apply the principle of reasonable construction to give effect to the purpose or intention of the provision, as apparent from the scheme of the Act, the Court must endeavour to harmonise the source of the Schemes as well as the regulatory procedure, because the statute should be interpreted in such a way to avoid absurdity and oracular interpretation and to have harmonious construction to advance the implementation of the schemes and to make them workable, unless it is impossible to do so, rather than making it meaningless. 19.3. This leads us to refer back the intention behind the Sales Tax Deferral/Waiver Scheme. The power conferred on the State to notify the Schemes, either for deferral or waiver, is nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nherent in the power under section 5A of the Act to issue a notification may in general be correct, but when such an exercise is challenged, like in the present case, it becomes necessary to examine as to whether such an exercise is within the scope and extent of power available under section 5A of the Act. The authority has to be alive to the fact that the power under section 5A of the Act is essentially a power to grant exemption in relation to duty of excise which is otherwise leviable under other provisions of the Act. Therefore, in exercise of such power under section 5A of the Act the authority cannot be permitted to take recourse to the principles applicable for determining whether duty is correctly levied or not. Once the authority has come to the conclusion that an exemption is required to be granted from payment of duty of excise, the only caveat being that it is in public interest, the authority cannot thereafter refer to loss of revenue as larger public interest for withdrawing such exemption, when the notification originally issued has fixed a time frame for the exemption. To put it differently, once power under section 5A of the Act has been exercised and exemption gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or liability acquired, accorded or incurred under any rule, notification or order so amended, repealed, superseded or rescinded; or (d) affect any penalty forfeiture or punishment incurred in respect of any offence committed under on in violation of any rule, notification or order so amended, repealed, superseded or rescinded; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty forfeiture or punishment as aforesaid. and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the rule, notification or order, as the case may be, had not been amended, repealed, superseded or rescinded." 24. Under section 38A of the Act it is provided that where any Rule, Notification, etc. made or issued under this Act is amended, repealed, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescission then five clauses (a) to (e) are set out to lay down that what is provided in each of the five clauses, which are alternative to each other, shall not take pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, section 38A of the Act incorporates in the statute the principle of a completed contract between the parties, whereunder the parties are obliged to fulfil their respective part of the concluded contract, and in case of failure, the Court may step in and direct the defaulting party to specifically perform his part of the promise. To put it differently, one may say that the principle of promissory estoppel, as normally understood, has been incorporated in the statute. ** ** ** 27. In view of various decisions of the Apex Court cited by both the sides a consensus emerges that the approach of the Court in the matter of invoking the principle of promissory estoppel depends on facts of each case. The general principle is that once a representation has been made by one party and the other party acts on that representation and makes investments and thereafter the other party resiles, such act cannot be stated to be fair and reasonable. This principle is applicable even in a case where one of the parties, namely, the party making a representation may be the State. It is also stated that promissory estoppel cannot be invoked against legislation. This is only partly correct. A distin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the people, the Government or its instrumentality should abide by their commitments. In this context, the action taken by the appellant-Corporation in revoking the benefits given to the entrepreneurs in the hill areas will sadly reflect their credibility and people will not take the word of the Government. That will shake the faith of the people in the governance. Therefore, in order to keep the faith and maintain good governance it is necessary that whatever representation is made by the Government or its instrumentality which induces the other party to act, the Government should not be permitted to withdraw from that. This is a matter of faith." " 26.2 Accordingly, Full Bench of the Gujarat High Court in Sal Steel Ltd. v. Union of India held that withdrawal of exemption without any basis, whatsoever, as in the instant case, is arbitrary, unreasonable, illogical and irrational and contrary to the doctrine of promissory estoppel. 27. The Government having granted such benefits of exemption of excise duty, basically invoking the powers traceable under Articles 73 and 162 of the Constitution of India by which respective Governments took policy decisions and consequently tracing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 28.10.2009 of Justice D. A. Mehta, referred to above, (i) if a subject is able to establish having acted on the promise made, put himself in a detrimental position, the other party is obliged in law to make good the promise, even if the promise is by way of a delegated legislation; and the State cannot be heard to complain that the promise has resulted in financial loss; (ii) of course, it is equally well settled that no person can be permitted to misuse the concession or benefit and invoke promissory estoppel. If one party abuses the concession, it is always open to the other party to revoke such concession; and (iii) if there is no cogent reasons in the form of direct evidence pointing out misuse of the concession. 30. The above view is also fortified by the decision of the Apex Court in U.P. Power Corpn. Ltd. v. Sant Steels & Alloys (P) Ltd. AIR 2008 SC 693. 31. For the above reasons, the impugned proceedings dated 27.3.2008 and 10.6.2008 are quashed but however, without prejudice to the rights of the Revenue to deny duty exemptions in appropriate cases, based on material facts and cogent reasons, of course, after following due process of law. 32. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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