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TMI Blog2010 (12) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... e new section been enforced at all material times within a period as specified therein. the challenge to the notifications dated 1-3-2007 and 25-4-2007 based on Policy 1997 cannot be sustained. A contrary intention being apparent from Section 154 of the Finance Act, 2003 read with Schedule 9 thereto as well as the notifications issued after the Policy 1997 curtailing/regulating from time to time the exemptions from payment of excise duty as contemplated by the said Policy, I am of the unhesitant opinion that the petitioner too is not entitled to any protection under Section 38A of the Act. There is no discernible conflict in the approach of the Respondent authorities in promulgating the policy, 2007 or issuing the impugned notification. No mala fide or extraneous consideration is also decipherable. Petition dismissed - decided against petitioner. - WP (C) No. 749 of 2010 - - - Dated:- 10-12-2010 - Amitava Roy, J. Shri A.K. Bhattacharyya, Sr. Advocate, J. Das, S.K. Medhi and R.K. Bharali, Advocates, for the Petitioner. Shri K.N. Choudhury, SC, R. Dubey, B. Sarmah, Ms. R. Deka and B.K. Kashyap, Advocates, for the Respondent. JUDGMENT Feeling distressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t exempted the specified goods from excise duty or additional excise duty with regard to the units located in certain areas/industrial estates etc. The exemption so granted was extended to new industrial units that had commenced their commercial production on or after 24-12-1997 as well as those that had existed before that date but had undertaken substantial expansion by way of increase in their installed capacity by not less than 25% on or after the said date. 3. According to the petitioner, though it was initially hesitant to set up its units in the Northeastern Region due to logistical and locational problems as well as other difficulties, in view of the assurance of excise duty exemption for a period of 10 years, it decided to do so and thus set up manufacturing units within the areas specified in the aforementioned notifications. The commercial production in the fifteen units so established in the industrial estate, Bamunimaidam, Guwahati of which 8 were devoted to the manufacture of pan masala commenced in the years 2001, 2002, 2006 and 2007. In the process it has invested huge amounts generating as well substantial employment to the locals besides stimulating industriali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Notification Nos. 32/99-C.E. and 33/99-C.E. to the petitioner were sought to be withdrawn vis- -vis pan masala falling under Chapter 21 of the First Schedule to the Tariff Act, 1985 signifying the mandate of payment of full excise duty by the manufacturers of the said commodity/goods. Contending that such unilateral withdrawal is arbitrary and unwarranted as well as annihilative of its legitimate expectation besides being impermissible qua the precept of promissory estoppel, the petitioner claims to have unsuccessfully represented before the various authorities of the concerned Departments of both the Governments and distraught by their gelid response has turned to this Court for judicial intervention. It, however, has referred to the office memoranda dated 22-11-2007, 24-1-2008 and 23-2-2009 of the Ministry of Commerce and Industries, Department of Industrial Policy and Promotion, Government of India, exhorting the Ministry of Finance, Department of Revenue for a decision on the petitioner s request for the reconsideration of the withdrawal of excise duty exemption to pan masala industries set up under the Policy 1997. 6. The respondents 1 to 4 have in two instalments submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued another Notification No. 69/2003, dated 25-8-2003 also under Section 5A of the Act granting exemption to the extent of 50% of the Central Excise duty under certain conditions stipulating inter alia that the benefit would be extendable to the units that had availed incentives under the Notification No(s) 32/99-C.E. and 33/99-C.E. and had continued their manufacturing activities on or after 28-2-2001. Subsequent thereto vide Notification No. 8/2004, dated 21-1-2004 under Section 5A of the Act, the Government of India in supersession of the Notification No. 69/2003, dated 25-8-2003 exempted all goods falling under sub-heading 2401.90, 2402.00, 2404.49, 2404.50 or 2404.99 of the First Schedule or Second Schedule of the C.E. Tariff Act, 1985 from the whole of the excise duty etc. payable thereon subject to certain conditions as enumerated therein. Under these notifications dated 25-8-2003 and 21-1-2004, the petitioner was entitled to retain amounts payable as excise duty and invested in the projects undertaken by it to be subsequently verified and scrutinised by the Investment Appraisal Committee for issuance of a certificate on due satisfaction thereof. 8. On a post assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the benefit under Policy 1997 vis- -vis industrial units that have commenced commercial production on or before 31-3-2007 would not apply for tobacco and tobacco based products. The impugned notification dated 25-4-2007 has also been endorsed stating that the grant of exemption of excise duty in respect of tobacco products did not yield any noticeable progress or industrial development as contemplated. 11. In reiteration and reaffirmation of its pleaded assertions, the petitioner has highlighted the inconsistency in the approach of the respondents in withdrawing the exemption from Central Excise duty on pan masala and tobacco while sustaining the Income Tax exemption/rebate extended by the Policy 1997. According to it, the grant of exemption of excise duty after the incorporation of Section 154 of the Finance Act, 2003 by the Notification No. 69/2003-C.E., dated 25-8-2003 patently belied the plea of extinction of the promise qua the said incentive by such amendment. While insisting that the Policy 2007 saved the petitioner s pan masala manufacturing units that had commenced production on or before 31-3-2007 it reiterated its assailment of the impugned notification dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 alluded hereinbefore seeking to withdraw the benefits under the Central Excise Notification Nos. 32/99-C.E. and 33/99-C.E., dated 8-7-1999 issued in furtherance of the Policy 1997 so far as tobacco products as referred to therein are concerned. According to the petitioner, it is engaged in the manufacture of zarda (scented tobacco/pan masala) in the four out of its 15 manufacturing units located in the Industrial Estate, Bamunimaidan, Guwahati. Further three more such tobacco manufacturing units have also been set up at Agartala being incentivised by the representations made in the aforementioned policy. Contending that the commercial production in the said units had commenced in the years 1999, 2000, 2001, 2002, 2003, 2007 and 2008 respectively, it has asserted that it has thereby provided employment to about 2200 local persons thereat. It has claimed to have invested ₹ 6911.03 lakhs in its said units till September, 2009, and has claimed to have been sanctioned the benefit of refund under the said Policy during the period 17-11-2000 to 28-2-2001. It has referred to the notifications dated 31-12-1999, 17-1-2000, 22-1-2001, 1-3-2001, 25-8-2003, 21-1-2004 and 9-7-2004 mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to invoke its writ jurisdiction on more than one occasion. It refuted as well the respondent s plea that the notifications dated 25-8-2003, 21-1-2004 and 9-7-2004 had failed to achieve their objectives and charged the respondents of causing hindrances against it on one hand and accused it of the non-implementation thereof on the other. It contended that the Investment Appraisal Committee though had certified the investment of ₹ 35 crores out of its claim of ₹ 96 crores, it did not reject the petitioner s investment claims of the remaining amount. 18. In this narrated backdrop of the rival assertions, Mr. Bhattacharyya has emphatically argued that having regard to the underlying objective of the policies involved and the unequivocal and conscious assurances of the highest administrative authorities, a purposeful interpretation for the effectuation thereof ought to be adopted. As the petitioner admittedly was entitled to the benefit amongst others of exemption from excise duty on its products as involved under the Policy 1997, having duly complied with all the stipulations as embodied therein, it is evidently qualified for the same under the Policy 2007 as well as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be adjudged as non est, he pleaded. The learned senior Counsel refuted the plea that the notification dated 25-8-2003 is independent of the Policy 1997. Referring to the various clauses of this notification as well, Mr. Bhattacharyya has contended that it is obviously pursuant to the Policy 1997 and is to remain in force for a period of 10 years. 19. He argued that the impugned notification dated 1-3-2007 in particular having been issued before the Policy 2007, the reason therefor cannot thus be logically linked with the interpretation of the respondents based on the Negative List. The learned Sr. Counsel has profusely relied upon the pleaded averments demonstrating the steps taken by the petitioner in setting up its units for manufacture of pan masala and other tobacco products in the region specified by the Policy 1997, investments in connection therewith, employment statistics, date of commencement of production thereat as well as the excise duty paid so as to bolster its plea founded on legitimate expectation and promissory estoppel. Contending that the petitioner in spite of its high and low in its business ventures pertaining to the units involved has still been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Anr. v. Union of India. (8) Praneswar Das and Another v. State of Assam and Others - AIR 73 GHY 51, (9) Vadilal Chemical Ltd. v. State of A.P. Anr. - (2005) 6 SCC 292 (10) Union of India and Others v. Shree Ganapati Rolling Mills Pvt. Ltd. and Others, (2006) 4 GLT 1 (11) M/s. Tilokchand and Motichand and Others v. H.B. Munshi and Another, (1969) 1 SCC 110 (12) Ramchandra Shankar Deodhar and Others v. State of Maharashtra and Others, (1974) 1 SCC 317 (13) Hindustan Petroleum Corporation Ltd. v. Dolly Das, (1999) 4 SCC 450 (14) (1982) 1 SCC 379 - R.S. Makashi Ors. v. I.M. Menom Ors. (15) (1972) 3 SCC 432 - P.B. Roy v. Union of India. (16) 2009 (235) E.L.T. 5 - Gillete India Ltd. v. Union of India. (17) MRF Ltd., Kottayam v. Asstt. Commissioner (Assessment), Sales Tax and Others, (2006) 8 SCC 702 = 2006 (206) E.L.T. 6 (S.C.) (18) (2008) 2 SCC 777 - U.P. Power Corporation Ltd. and Another v. Sant Steels Alloys (P) Ltd. and Others. (19) (2010) 3 SCC 274 - State of Bihar v. Kalyanpur Cements. (20) (1979) 2 SCC 409 - M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. and Ors. (21) (2006) 8 SCC 702 - MRF Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory estoppel is unavailable to the petitioner against the exercise of a statutory and or a legislative power, it having omitted to question the validity of the Policy 2007, its contentions founded on promissory estoppel and legitimate expectation are unworthy of any attention, he argued. While pleading that the Policy 2007 is in public interest, the learned Additional Advocate General underlined that in absence of any material on record to the contrary, the notification dated 25-4-2007 in conformity therewith is wholly unassailable. Reiterating that the withdrawal of the benefit of the exemption vide Section 154 of the Finance Act, 2003 read with Schedule IX thereof had been upheld by the Apex Court, Mr. Choudhury pointed out that as the Policy 1997 remained in vogue even thereafter, the notification dated 25-8-2003 was issued granting partial exemption from payment of excise duty to the units as specified therein which had commenced production on or after 24-12-1997 but not later than 28-2-2001. The stipulations contained in the notification dated 25-8-2003 being conditioned by the prescriptions of the one dated 1-3-2001, it was evidently independent of the Policy 1997, he argued. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) (13) M/s. Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and Others, (1979) 2 SCC 409 (14) Kolhapur Canesugar Works Ltd. v. Union of India and Others, (2000) 2 SCC 536 = 2000 (119) E.L.T. 257 (S.C.) (15) Bansidhar and Others v. State of Rajasthan and Others, (1989) 2 SCC 557 (16) State of Orissa and Another v. M/s. M.A. Tulloch and Co. etc., AIR 1964 SC 1284 (17) (2003) 5 SCC 437 - Union of India and Another v. International Trading Co. and Another (18) Sethi Auto Service Station and Another v. Delhi Development Authority and Others, (2009) 1 SCC 180 (19) Dhampur Sugar (Kashipur) Ltd. v. State of Uttaranchal and Others, (2007) 8 SCC 418 (20) Novopan India Ltd., Hyderabad v. Collector of Central Excise and Customs, Hyderabad, 1994 SUPP 3 606 = 1994 (73) E.L.T. 769 (S.C.) (21) Tata Iron and Steel Co. Ltd. v. State of Jharkhand and Others, (2005) 4 SCC 272 (22) R.C. Tobacco (P) Ltd. and Another v. Union of India and Another, (2005) 7 SCC 725 = 2005 (188) E.L.T. 129. 24. Before venturing into the issues of moment stirred by the competing pleadings and the arguments founded thereon, politic it would be to attend to the chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of refusing relief on that count is that the rights, which have accrued, to others in the interregnum ought not to be allowed to be disturbed unless there is a reasonable explanation for the interval. 27. The preliminary objection based on delay was sustained in the contextual facts of R.S. Makasi and Others, supra, by the Apex Court noticing that during the intervening period of 8 years vested rights regarding seniority rank and promotions had accrued to a large number of respondents therein. 28. In Hindustan Petroleum Corporation, supra, the Apex Court in the context of the avowal of laches of the respondents therein observed that delay by itself may not defeat the claim for relief unless the position of the adversary is so altered that it cannot be retracted on account of lapse of time on the inaction of the other party. That the appellants therein would not be put to undue hardship in any manner by reason of the delay as pleaded was also taken note of. 29. Delay thus is not an irremediable vitiating malady acknowledged by the rule of law eventuating refusal of relief though otherwise justified on the merit of the claim. It is a matter of discretion exercisable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondences of the Ministry of Commerce and Industry, Department of Industrial Policy and Promotion had the potential of generating some expectations in it of the forthcoming steps for the mitigation of its remonstrance. The materials on record do not demonstrate that the omission on the part of the petitioner to immediately approach this Court following the issuance of the impugned notifications has vested any right in the respondents, which if the issues are scrutinised and disposed of on merits, would be prejudicially affected. The facts and circumstances of the case do not in the estimate of this Court portray deliberate and wilful inaction and laches on the part of the petitioner so as to disqualify its impugnment to be adjudicated on merits. The plea therefor is unsustainable. 32. On the aspect of suppression of facts, the Apex Court in K.D. Sharma, supra, while emphasising that the petitioner seeking prerogative writs must come with clean hands and disclose all facts failing which his petition may be dismissed at the threshold, observed that such a consequence would ensue if the Court, on a scrutiny of the textual facts is satisfied that it had been misled and or deceived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st with the judicial elucidations on the other legal propositions encompassed in the rival assertion. Delegated Legislation : 36. In State of Bihar v. Suprabhat Steel Limited and Others, supra, a notification issued by the State Government in exercise of power under Section 7 of the Bihar Finance Act, 1981, was contended to be repugnant to the Bihar Industrial Incentive Policy, 1993, as thereby certain category of industrial units were sought to be excluded from the benefits envisaged thereunder. The Apex Court while observing that the notification under the aforementioned legal provision was an instrument to enable the industrial units to avail the incentives and benefits declared by the State Government in the Policy, it would not be permissible for it, in the exercise of such power to deny any benefit which is otherwise available to an industrial unit thereunder. Noticing that the policy had been issued on being approved by the Cabinet, it was held that any notification so issued if found to be inconsistent therewith, would be bad to that extent. Unmistakably, the legal premise of the conclusion is that a notification under Section 7 of the Bihar Finance Act, 1981 was comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tifications in the context of an industrial policy, promising tax exemption for setting up an industry in the backward area should be read liberally keeping in mind the objectives envisaged thereby (policy). While recognising the right of an authority granting an exemption to revoke the same, the Apex Court in U.P. Power Corporation Limited, supra, interfered with a notification issued under Section 49 of the Electricity (Supply) Act, 1948, reducing the concession of the hill development rebate earlier allowed to the industrial units as specified principally on the ground that the said legal provision did not stipulate the withdrawal of the benefit so granted unreservedly at any point of time. The Apex Court was of the view that the impugned notification being in the form of a delegated legislation such curtailment in the manner effected was impermissible. The plea of public interest in support of such action in the facts was also rejected to be not borne out by the facts. In this context, their Lordships observed that the Government or its instrumentality ought to abide by their commitments in order to sustain the faith of the polity in the governance more particularly in the doma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete India Limited, supra, the High Court of Himachal Pradesh interpreted Clause (c) of Section 38A of the Act to be protective of a right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order amended, repelled, superseded or rescinded and thus annulled the impugned notification whereby the benefit of exemption from whole of excise duty availed by the petitioners, was recalled by the Allahabad High Court in Simbholi Sugar Mills Limited, supra, while tracing the insertion of the above provision in the Act w.e.f. 28-2-1944 adjudged in favour of continuance of a proceeding under Rule 10 of the Central Excise Rules, 1944, which stood omitted w.e.f. 17-11-1980 vide a notification dated 12-1-1980 as referred to therein. Vis- -vis the scope of Section 38A and the applicability thereof, their Lordships of the Allahabad High Court propounded in favour of the savings otherwise contemplated thereby in absence of a different intention to the contrary. 44. A Constitution Bench of the Apex Court in State of Orissa and Another v. M/s. M.A. Tulloch and Company, supra, authoritatively declared the principle on which the saving clause in Section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured by the petitioners therein. While the legislative competence of the Parliament to enact laws with retrospective effect was conceded on behalf of the petitioners, absence of reason justifying retrospective withdrawal of the benefit of exemption was highlighted. The impugned legislation was thus impeached to be unreasonable and thus violative of Articles 14 and 19 of the Constitution of India. It was pleaded that the change in policy with retrospective effect would unsettle the vested right and deprive people of the benefits already enjoyed and cause financial burden, which were clearly unreasonable and arbitrary. It was argued as well that although estoppel operates only against the executive and not against a statute, violation of the promises and representations of the Government by the legislature would indeed be a facet of unreasonableness afflicting the restrained law with the vice of the outrage of Articles 14 and 19. That the reasonableness of the law whereby the benefit of exemption is withdrawn with retrospective effect ought to be judged in the light of the representations to that effect made by the Government was also pleaded. 48. It was responded on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities cited at the Bar. Promissory estoppel variously described as equitable estoppel , quasi estoppel and new estoppel is not really based on principle of estoppel but is a doctrine evolved in equity in order to prevent injustice when a promise is made by a person knowing that it would be acted upon by the promisee so that if it is so it would be inequitable to allow the promisor to renege therefrom. In the context of the Government, if it, thus makes a promise knowing or intending that it would be acted upon by the promisee and in fact by doing so the latter alters his position, the former would be bound by the promise and then a plea of executive necessity simpliciter would not be a sufficient justification for the former to absolve itself of the consequences of recession. If a change in policy is sought to be urged by the Government as a justification for his departure from the promise, it would have to establish the reason and the basis thereof to demonstrate that overriding public interest which is a superior equity over individual equity would render it inequitable to enforce the resultant liability against it. In absence of such supervening public interest it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joy the benefits thereof during the period of the grant. Referring amongst others to its decision in Shree Bakul Oil Industries v. State of Gujarat - (1987) 1 SCC 31 the appellate Court held that this right to enjoy was defeasible so much so that it could be taken away in exercise of the very power under which the exemption is granted. 53. The judicially evolved and time tested essentialities for the invocation of the doctrine of promissory estoppel are synopsized thus : (a) a party must make an unequivocal promise or representation by word or conduct to the other party, (b) the representation is intended to create legal relations or affect the legal relationship, to arise in the future, (c) a clear foundation has to be laid in the petition with supporting documents, (d) it has to be shown that the party invoking the doctrine has altered its position relying on the promise, (e) it is possible for the Government to resile from its promise when public interest would be prejudiced if the Government were required to carry out the promise if enforced would result in a coreach of any law, the Court will not apply the doctrine in abstract. 54. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rift on a featureless sea of unpragmatism. It was propounded that if a denial of legitimate expectation in a given case amounts to contravention of right guaranteed or it is arbitrary, discriminatory, unfair or bias, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article 14, but a claim based on some legitimate expectation without knowing more cannot ipso facto give a right to invoke these principles. It was held that the concept of legitimate expectation is not the key which unlocks the treasure of natural justice and it ought not to unlock the gates which shut the Court out of review on the merits , particularly when the elements of speculation and uncertainty are inherent in that very concept. 57. In this context the Apex Court in Commissioner of Sales Tax, Orissa Anr. (supra) while dealing with the sales tax exemption of the respondent therein under the industrial policy involved held that the provisions of the related Orissa Sales Tax Act, 1947 ought to be examined to ascertain the bearing thereof on the policy. The relevance as well as the determinative orientation of legislation relata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atives set out in the Policy. A copy of the memorandum was also forwarded to all Ministries/Departments of the Government of India as well as the Chief Secretaries and the Secretaries of the Industries Department of the North Eastern States. The Office memorandum carrying the policy was issued by the Government of India in the Ministry of Industry, Department of Industrial Policy and Promotion. By the Notification No. 32/99-C.E., dated 8-7-1999 issued under Section 5A of the Act read with Section 3(3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the Central Government being satisfied that it was necessary in public interest exempted, the goods specified in the First and Second Schedule to the Tariff Act, 1985 and cleared from a unit located in the Growth Centres or Integrated Infrastructure Development Centres etc. specified in the annexure appended thereto from the duty of excise or additional duty of excise leviable thereon under any of the aforementioned enactments as was equivalent to the amount of duty paid by the manufacturer of goods from the account currently maintained under Rule 9 read with Rule 173G of the Central Excise Rules, 1944 (hereaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule to the Tariff Act, 1985 was withdrawn from the list of items amenable to exemption from excise duty under the above mentioned two notifications dated 8-7-1999. The prevailing configuration underwent further change vide Notification No. 6/2001-C.E., dated 1-3-2001 whereby the notifications dated 8-7-1999 as above were amended excluding all goods falling under Chapter 24 of the First and Second Schedules to the Tariff Act, 1985 from the purview of such exemption. Noticeably this did not affect the incentives to that effect vis- -vis the pan masala catalogued under Chapter 21 of this Act but sought to deny the benefit thereof vis- -vis the goods falling under Chapter 24 of the First Schedule or Second Schedule to the Tariff Act, which included other tobacco products as recited therein. Though the petitioner s units engaged in the manufacture of tobacco products were thus affected, the materials on record do not establish that the said notification at its instance had been nullified by any judicial forum. 63. On the other hand, by the Finance Act, 2003, which received assent of the President of India on 14-5-2003, Section 154 was inserted in the following terms :- Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial times. (4) Recovery shall be made of all amounts of duty or interest or other charges, which have not been collected, or, as the case may be, which have been refunded but which would have been collected or, as the case may be, which would have not been refunded if the provisions of this section had been in force at all material times within a period of thirty days from the day on which the Finance Bill, 2003, receives the assent of the President, and in the event of non-payment of duty or interest or other charges so recoverable, interest at the rate of fifteen per cent., per annum shall be payable from the date immediately after the expiry of the said period of thirty days till the date of payment. Explanation. - For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if the notifications referred to in sub-section (1) had not been amended retrospectively by that sub-section. 64. By a legislative mandate, therefore, the Notification Nos. 32/99-C.E. and 33/99-C.E., dated 8-7-1999 corresponding to G.S.R. 508(E) and G.S.R. 509(E) stood amended retrospect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l provision, it neutered the existence and the dominion of the Policy 1997 vis- -vis the prescriptions thereof as manifest in the Ninth Schedule. The determination in R.C. Tobacco, supra, therefore, visibly truncated the extent and expanse of the application of the Policy 1997 and rendered it non est so far as the representation thereunder for exemption from payment of excise duty on cigarette, pan masala containing tobacco falling under heading 2106.00 or 2400.49 on and from 8-7-1999 as well as goods falling under Chapter 24 on and from 1-3-2001. It is in this premise that the notifications that followed would have to be analysed. 66. By notification No. 69/2003-C.E., dated 25-8-2003 issued under Section 5A of the Act and other cognate enactments, a few of the goods falling under Chapter 24 were thus exempted from payment of excise duty subject amongst others to the condition that the units so identified had commenced commercial production on or after 24-12-1997 but not later than 28-2-2001 and had already availed the benefit of the notifications dated 8-7-1999 and had been continuing with the manufacturing activities after 28-2-2001. 67. The conditions of eligibility to ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in which the investment as required in the latter notification was to be made. 68. It was subsequent thereto that the Policy 2007 was promulgated by the Office Memorandum No. 10(3)/2007-DBA-II/NER by the Government of India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion. Thereby all new units as well as existing units which would go in for substantial expansion unless otherwise specified and which would commence commercial production within 10 years from the date of the notification i.e. 1-4-2007 were construed to be eligible for the incentives mentioned therein including 100% excise duty exemption on finished products made in the North Eastern Region as was available under the Policy 1997 for a period of 10 years from the date of commencement of commercial production. The incentives on substantial expansion were to be given to the units effecting an increase by not less than 25% in the value of fixed capital investment in plant and machinery for the purpose of expansion of capacity/modernization and diversification as against an increase by 331/2 as prescribed by the Policy 1997. 100% excise duty exemption as assured under the Policy 1997 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Policy 2007, this contention is wholly misplaced. 70. Having regard to the series of events subsequent to the promulgation of the Policy 1997 and reading between the lines of the Policy 2007, I am inclined to sustain the resistance offered by the respondents. Clause (ii) of the Policy 2007 with the caption Duration indicates that all new units as well as existing units which go in for substantial expansion unless otherwise specified and which commence commercial production within 10 years from the date of the notification would be eligible for incentives for a period of 10 years from the date of commencement of commercial production. The Policy did contemplate only new units as well as existing units venturing out for commercial production within 10 years from the date of issuance thereof unless otherwise specified. The negative list provided by the Policy 2007 spells out the industries, which are ineligible for the benefits thereunder. In the estimate of this Court, these are the industries contemplated to be excepted from the purview of the Policy 2007. Clause 2 thereof when viewed in this context refers to the industrial units, which have commenced commercial production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st establish clearly that he is covered by the said provision and in case of doubt or ambiguity, the benefit of it must go to the State. The power to lay down a policy by an executive decision or by legislation includes the power to withdraw the same unless in the former eventuality it is afflicted by a mala fide exercise of power or if the action taken is in abuse of power. It is judicially recognized that a authority has to be left to decide its full range of choice within the executive or legislative power and more particularly in matters of economic policy, the Courts have conceded greater leeway to the executive and the legislature. If the Government is satisfied that change in the policy is warranted in public interest it would be entitled to revise it and herald a new one and the Court would prefer to permit a free play to it in fiscal matters and to act upon the same. This discretion to alter the policy in exercise of executive power is however neither unqualified nor unfettered and such an action is amenable to judicial review. The Apex Court in Bannari Amman Sugars Ltd. (supra) emphasized that the State to this effect has to act validly on discernible reasons and not w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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