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TMI Blog2010 (3) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... ly dealt with. However, I find that the factual aspects may be required to be recorded, in order to consider the controversy and the issues arise for consideration, therefore, to that extent, the same shall be narrated at appropriate places. 4. Following aspects arise for considering the controversy in the present group of petitions. (1)Whether any declaration was made by the Central Government in formulating fiscal policy and if yes, whether the same was by way of exemption simplicitor or by way of an incentive offered for establishment of the industry in a particular area or a specific region, to new entrepreneur. (2)Whether the petitioner could be said to have altered the position based on the aforesaid declaration of fiscal policy brought into force. (3)Whether bar of promissory estoppel would apply and if yes, to what extent in fiscal matters. (4)Whether the impugned policy could be said to be for withdrawal of the benefit/incentive retrospectively, assured to the petitioners or can be said as rationalising the benefit by making it retroactive. (5)Whether the bar of promissory estoppel would operate to the respondent Central Government, if yes, to what extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinued for granting exemption to the duty paid less the CENVAT credit availed of. To say in other words, the duty was to be refunded, if paid in actual, either in cash or in personal ledger account of the unit concerned. 8. On 27.03.2008, vide notification No.16/2008, the words and the figure to the amount of duty paid by the manufacturer of the goods other than the amount of duty paid by utilisation of the CENVAT credit under CENVAT Credit Rules was substituted by the words to the duty payable on value addition undertaken in the manufacture of the said goods by the said unit . In the said notification, the duty payable on the value addition was made as equivalent to the amount calculated as a percentage of total duty payable on the said excisable goods as per the table contained in the said notification. The said table provided for various rates in different chapters of the First Schedule for different categories. In the said notification, it did provide for an option available to a particular manufacturer to move for modification of the rates prescribed in the table and the enabling powers were given to the Commissioner of Customs or Central Excise to alter the rates. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect for establishment of the new units by the petitioners in Kutch District, it appears that there is no change nor withdrawal or the alteration in the policy on account of non-compliance of conditions for establishment of new industrial units. If based on the aforesaid fiscal policy of the Central Government by way of incentive for establishment of new industrial unit in Kutch District, the petitioners have established their industrial unit in Kutch District, it could hardly be said that the petitioners have not altered their position. Even otherwise also, if the condition of notification of new industrial units is not fulfilled. Even otherwise also, none of petitioners would be entitled to the benefit of the policy of refund of the actual duty paid, but since such is neither pleaded nor comes up for consideration, the same is not required to be examined further. However, if the petitioners have established new industrial units in Kutch district based on the aforesaid policy of the Central Government by way of a special incentive of refund of actual duty paid, it can be said that the petitioners have altered their position and such alteration of the position would be the making o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king the same benefit under Section 49 of the Act of 1948 by invoking the provisions of the General Clauses Act that an authority granting exemption has a right to revoke the same also. It is true that it has a right to revoke the same but if the other party has suffered on that account then such representation will be against the public policy and the morality. Notification issued under Section 49 of the Act of 1948 for giving the benefit of exemption for the hill areas was in the nature of delegated legislation and not an Act framed by the State Legislature. Therefore, a distinction has to be made between the delegated legislation and the primary legislation framed by the legislature. The pertinent aspect is that in the very decision, the Apex Court while exercising the question as to whether the State could withdraw the exemption on the alleged ground of misuse of the policy by certain entrepreneurs, observed at para 30, 31, 32 and 33 as under: 30. ......... Therefore, if such benefit has not been extended then a different stand will follow but so far as the delegated legislation is concerned, this kind of revocation cannot be sustained. It is highly against the public m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c interest. Since the benefit was given to these units in the hill areas, there should have been overwhelming evidence to show some mala fide on the part of these consumers which have persuaded the Corporation to revoke it. If there was no misuse of the energy by these units in the hill areas to whom the concession had been granted then in that case it cannot be taken that there was really public interest involved which persuaded the Corporation to revoke the same. 32.No person can be permitted to misuse the concession or benefit and invoke promissory estoppel. Promissory estoppel is not one sided affair, it is rather two sided affair. If one party abuses the concession then it is always open to the other party to revoke such concession but if one party avails the benefit and is acting on the same representation made by the other party then the other party who has granted the said benefit cannot revoke the same under the garb of public interest. Therefore the grounds that the revocation notification was issued in public interest and that same has the flavour of the statute, cannot persuade us to uphold it sustained. 33....There is no gain saying that the public interest is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le by way of exemption, such policy is misused by the industrial units. He submitted that if it came on record before the Government that the policy is being misused, it has tried to rationalise the same by fixing a particular rate prescribed for the duty and the refund as per the impugned notification. In the submission of the learned Additional Solicitor General, such rationalisation is not having retrospective character, but is having retroactive character. He further submitted that the powers for fixation of rates are expressly provided to enable the concerned authority to alter the same if sufficient material is produced, therefore, he submitted that such could be said to be made permissible in fiscal policy to the Government in exercise of the power under Section 5A of the Act. He therefore contended that in the facts of the present case, the bar of promissory estoppel would not operate and the change in policy deserves to be maintained. He also contended that the approach of the Court would be with the presumption of validity of such policy since whether there is public interest or not is to be left to the Government on the basis of the material available before it and the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion on the principle that there cannot be any estoppel against the statute. b) Such cannot be permitted to be invoked against the overwhelming public interest. (2)The legislature or the parliament has power for diluting its effect retrospectively by enacting any law. 17.If the facts of the present case are examined in light of the aforesaid, it is apparent that by the notification dated 31.07.2001 and others, special incentive was given to the entrepreneur for establishment of new industrial units in Kutch district granting full refund of the actual duty paid as observed in the earlier paragraph and further, as observed earlier, for establishment of new industrial undertaking, the petitioners have altered their position and right has accrued based on the doctrine of promissory estoppel. It does appear that it is not the case of the respondent Central Government that such representation or the promise given for granting exemption was unauthorisedly given or was given in contravention to any statutory provision. The contention that the power to grant exemption would include power to withdraw the exemption as per the General Clause Act, even if accepted, the same has to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdraw the exemption granted by way of a special incentive can be permitted to be withdrawn with retrospective effect. 18.If the record produced on behalf of the Central Government is considered, it appears that none is concerning to the object which was at the time of formulation of the policy or achievement of the said object. On the aspects of public interest, the ground as sought to be canvassed is that the duty paid in such area where incentive provided was higher in comparison to the other places and it was orally contended by the learned Additional Solicitor General that such would show that the exemption policy was being misused or there were manipulations for getting the refund. The contention considered in either way may at the most attract for initiation of the action in accordance with law against the industry concerned, if there is manipulation or abuse of the policy. Even if it is considered that some units had misused or had abused the policy, the same can hardly be said to be a valid ground for withdrawing the benefit conferred upon the bonafide industrial units. Further, there is no satisfactory material demonstrated for such purpose. Even if such contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y any express provision of the statute and not by way of any delegated or subordinate legislation. Under these circumstances, even if it is considered that in fiscal matter, the Government has power to alter or withdraw the exemption benefit, such cannot be permitted to be exercised with the retrospective effect dehors the doctrine of promissory estoppel, if it is established that a specific representation by way of a special incentive was made to attract new entrepreneur have established the industry in a particular area or region. 21.It is not the case of the respondent Central Government that the parliament has passed any Act to alter the rights accrued with retrospective effect. Therefore, the question as to whether such Act of Parliament or the legislature would meet with the test of Article 14 of the Constitution being reasonable or not is not required to be examined in the present petitions. 22.If the observations made hereinabove are taken into consideration, it can be said that the impugned policy of withdrawal of the benefit/incentive to the petitioners is retrospective and not retroactive. Consequently, the bar of promissory estoppel would operate against the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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