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TMI Blog2024 (1) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... xempted goods. Case of Revenue is that the petitioners having opted for availing the benefits under the Notification No. 8/2003-CE dated 01.03.2003 to get the benefit of exemption from payment of Central Excise Duty, they cannot be extended the benefit of budgetary support which is restricted to only those units who had their registration under Central Excise and had paid Central Excise Duty and had collected their refunds as applicable. HELD THAT:- As is seen from the recital of the notification of the budgetary support scheme, it is to provide financial support to those industries who were existing eligible manufacturing units operating in the various states mentioned including the North Eastern States under the industrial policies announced. The petitioner units were also availing benefits under the Industrial Policy and under the erstwhile Central Excise Law but were however either exempted from payment of central excise duty by virtue of their turnover being below threshold limit of 1.5 crores per annum or that the items which they had manufactured were already exempted. No materials have been placed before the Court by the respondents to suggest that because the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary support scheme. The respondent authorities are therefore directed to examine the individual claims of the petitioners and if they are found to have satisfied the criteria and the eligibility laid down under the NEIIPP, the benefits of budgetary support scheme as had been extended to other similarly situated units shall also be extended to the petitioner units. The respondent authorities will forthwith proceed to examine the individual claims and pass appropriate orders within a period of 30 days from the date of receipt of the certified copies this order. Petition allowed. - HON BLE MR. JUSTICE SOUMITRA SAIKIA Writ Petition(C) No. 2764 of 2019, Writ Petition(C) No. 2762 of 2019, Writ Petition (C) No. 2715 of 2019, Writ Petition (C) No. 2673 of 2019, Writ Petition(C) No. 2703 of 2019, Writ Petition(C) No. 2660 of 2019, Writ Petition(C) No. 2662 of 2019, Writ Petition(C) No. 2659 of 2019, Writ Petition(C) No. 2661 of 2019, Writ Petition(C) No. 2677 of 2019, Writ Petition(C) No. 1936 of 2019, Writ Petition(C) No. 4375/2020, For the Petitioners : Dr. Ashok Saraf, Sr. counsel assisted by Mr. P. Baruah, Advocate For the Respondents : Mr. S.C. Keyal, SC, GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estate or industrial area as the case may be from the payment of excess or such additional duty of Excise leviable thereof as is equivalent to the amount of duty paid by the manufacturer of these goods from the account current maintained under Rule 9 read with Rule 173(G) of the Rules. The exemptions in the said Notification were made applicable only to new industrial units which commenced production on or after 24th day of December, 1997 or to industrial units existing before 24.12.1997 but which undertook substantial expansion by increase in the installed capacity by not less than 25% on or after 24.12.1997. These exemptions were made available to the industrial units for a period of 10 years from the date of publication of the official gazette. The Government of India thereafter in its continued efforts to encourage development of industries in the Northeastern Region announced a new package of fiscal incentives and other concessions for the Northeastern Region to continue the exemptions and benefits as was promised. This new package was known as North East Industrial Investment Promotion Policy, 2007 (NEIIPP). This policy was came effect from 01.04.2007. The said incentives wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India and Ors.) DICC/KAMRUP/EM(PT- 2)/01830/2013 17.10.2013 Mono Cartons/Boxes (Paper, Carry Bags, Offset Printing, Magazine/Journal and Exercise Books 3 W.P(C) No. 2659/2019 (Shree Balaji Polymers Vs. Union of India Ors.) DICC/KAMRUP/(RURAL)EM(PT 2)/01589/2017 16.02.2017 Cistern and WC Covers 4 W.P(C) No. 2662/2019 (Shree Balaji Udyog Vs. Union of India Ors.) DICC/KAMRUP/(RURAL)/EM(PT-2)/01577/2017 24.01.2017 Pre Laminated Particle Board 5 W.P(C) No. 2668/2019 (North East Wood Suppy Vs. Union of India and Ors.) DICC/DAMRUP(EM(PT- 2)/02766/2017 12.09.2017 Flash Door, Based Door, Membrane Door, Kitchen Door etc and other Plywood Lamination 6 W.P(C) No. 2715/2019 (Sajjan Kr. Jalan Ors. Vs. Union of India and Ors.) DICC/KAMRUP/EM(PT- 2)/01432/2012 02.06.2012 Shovels, Hooks etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below the threshold limits prescribed and consequently, there is no need to opt for availing the exemption under Central Excise duty. 4. In the year 2017, the Government of India Act abolished the earlier tax regime and replaced it by the Goods and Service Tax regime. The items dealt in by the petitioners were shown to be taxable under GST Act of 2017 and therefore, the petitioners got itself registered under the GST Act and started collecting GST and made payments thereof. In view of the repeal of the earlier tax enactments, there was no need to pay Central Excise Duty and consequently there arose a confusion on the incentives offered under the Industrial Policy more particularly with regard to the payment of Central Excise Duty and exemption thereof as was prescribed under the Industrial Policy. In order to continue the benefits as envisaged under the NEEIPP, 2007, the Government of India announced a scheme called the Budgetary Scheme to provide budgetary support to all the existing eligible manufacturing units operating in the States of Jammu Kashmir, Uttarakhand, Himachal Pradesh and Northeast including Sikkim who were eligible for the benefits of tax incentives under diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted goods but are required to pay GST under the GST regime. The petitioners are challenging the Scheme of budgetary support in so far as the budgetary support has not been extended to the petitioners because its industrial unit was not registered under the Central Excise Act, 1944 prior to introduction of the GST regime as the turnover of the industrial unit was below the threshold limit and/or the goods manufactured by the industrial unit were exempted from payment of excise duty. In WP(C) No. 2664/2019, 1936/2019, 2659/2019, 2662/2019, 2668/2019 and 2715/2019, the petitioners were not liable to pay any excise duty on the ground that their turnover was below the threshold limit and as such they were not registered under the Central Excise Act, 1944. In WP(C) No. 2660/2019, 2661/2019, 2673/2019, 2677/2019, 2703/2019, 2762/2019, 2764/2019, 2582/2020 2558/2020, the petitioners were not liable to pay any excise duty on the ground that they were manufacturing exempted goods and as such they were not liable to be registered under the Central Excise Act, 1944. Although the facts are identical in all the cases but for the purpose of this present written submission, the facts in WP(C) No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Policy Resolution were issued by various authorities of the Central Government. In so far as the exemption of Central Excise was concerned, the respondent no.3 issued notifications no. 32/99-CE and 33/99-CE dated 08.07.1999 granting exemption in respect of all excisable goods cleared from a unit located in the Growth or Integrated Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estates or Industrial Area or Commercial Estate, as the case may be, specified in the Annexure appended to the said notifications from such excise or additional duty of excise leviable thereon as is equivalent to the amount of duty paid by the manufacturer of goods from the account current maintained under Rule 9 read with Rule 173 G of the Rules. The exemption contained in the said notification was made applicable only to new industrial units which commenced commercial production on or after the 24th day of December, 1997 and to the Industrial Units existing before 24.12.1997 but undertook substantial expansion by way of increase in the installed capacity by not less than 25% on or after 24.12.1997. The exemption contained in the said notifications in terms of para 4 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking expansion, modernization or diversification. To give effect to the Industrial Policy of Assam, 2008, Government of Assam framed a scheme, namely, Assam Industries (Tax Exemption) Scheme, 2009. Since the petitioner established new industrial unit in pursuance to the NEIIPP, 2007 as well as the Assam Industries (Tax Exemption) Scheme, 2009, the petitioner firm became entitled to the benefits of VAT exemption under the NEIIPP, 2007 as well as the Industrial Policy of Assam, 2008 and the Assam Industries (Tax Exemption) Scheme, 2009 and accordingly the petitioner was issued with eligibility certificate dated 13.08.2014 for availing VAT exemption for a period of 7 years from 10.11.2012 (i.e. from the date of commencement of commercial production) to 09.11.2019. The petitioner was also issued with an entitlement certificate by the Commissioner of Taxes, Assam, Guwahati. 11. It is submitted that the petitioner industrial units although got itself registered under NEIIPP, 2007, but it did not opt to get itself registered with the Central Excise Department as the turnover of the petitioner was less than 1.5 crores which was below the threshold limit and the same was an option un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Service Tax Act, 2017 after devolution of the Central tax or the Integrated tax to the States, in terms of Article 270 of the Constitution of India. The objective of the said budgetary Scheme, as stated in the said notification, is as under: The GST Council in its meeting held on 30.09.2016 had noted that exemption from payment of indirect tax under any existing tax incentive scheme of Central or State Governments shall not continue under the GST regime and the concerned units shall be required to pay tax in the GST regime. The Council left it to the discretion of Central and State Governments to notify schemes of budgetary support to such units. Accordingly, the Central Government in recognition of the hardships arising due to withdrawal of above exemption notifications has decided that it would provide budgetary support to the eligible units for the residual period by way of part reimbursement of the Goods and Services Tax, paid by the unit limited to the Central Government s share of CGST and/or IGST retained after devolution of a part of these taxes to the States. 13. An eligible unit has been defined in Clause 4.1 of the said Scheme as under: Eligible unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall sanction reimbursement of the budgetary support. The sanctioned amount shall be conveyed to the applicant electronically. The PAO, CBEC will sanction and disburse the recommended reimbursement of budgetary support. 15. After framing of the aforesaid budgetary support Scheme, the Government of India vide Circular dated 27.11.2017 provided for that under the central Excise regime as it existed prior to 01.07.2017, the units located in the states of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim were eligible to avail exemption from payment of Central Excise duty in terms of area based exemption notifications. However, under the GST regime there was no such exemption and the existing units which were availing exemptions from payment of Central Excise duty prior to 01.07.2017 were required to pay CGST and SGST/ IGST like a normal unit and as such presently no exemption was available to these units by way of either exemption or by way of refund. It was further stated in the said Circular that to obviate the hardship faced by such units, the Central Government has decided to provide budgetary support to the eligible units which were operating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty because they were manufacturing goods which were exempted under the Central Excise Act, have now become liable to pay GST after its introduction with effect from 01.07.2017. However, such units have all been denied the budgetary support on the ground that such units were not registered under the Central Excise Act prior to introduction of the GST Act and were not availing any benefits under Notification No. 20/2007. It is submitted that the aforesaid action of the respondent authorities is absolutely illegal inasmuch as the petitioner industrial units were otherwise eligible units for availing various benefits as per Notification No. 20/2007 but only because their turnover had not exceeded the threshold limit, the petitioners were not required to pay central excise duty. If the turnover had exceeded the threshold limit the petitioners would have been liable to make payments of the central excise duty and claim refunds. As such, the petitioners cannot be denied the benefits of the Scheme of Budgetary support provided by Government of India. Similarly in case of the petitioners who were manufacturing items which were exempted under the Central Excise Act, thereby were not lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in (2006) 1 SCC 597 (xi) Amarendra Kumar Mohapatra Vs. State of Orissa, reported in (2014) 4 SCC 583 (xii) In Re. The Special Courts Bill, 1978, reported in (1979) 1 SCC 380 (xiii) Subramanian Swamy Vs. Director, CBI, reported in (2014) 8 SCC 682 Article 14, 15 19 (xiv) Union of India Vs. N.S. Rathnam and Sons, reported in (2015) 10 SCC 681; (xv) Makum Tea Co. (India Ltd) Vs. State of Assam, reported in (1997) 1 GLR 138 Interpretation of taxing statute-Exemption Notification (xvi) State of Jharkhand Vs. Tata Cummins Ltd., reported in (2006) 4 SCC 57 (xvii) Stat of Bihar Vs. Suprabhat Steel Ltd., reported in (1999) 1 SCC 31 Promissory Estoppel or Equitable Estoppel (xviii) Motilal Padampat Sugar Mills Co. Ltd. Vs. State of U.P., reported in (1979) 2 SCC 409 (xix) Century Spinning Mfg Co. Ltd. Vs. Ulhasnagar Municipal Council, reported in (1970) 1 SCC 582 (xx) Pournami Oil Mills Vs. State of Kerala, reported in 1986 Supp SCC 728 (xxi) Shri Bakul Oil Industries Vs. State of Gujarat, reported in (1987) 1 SCC 31 (xxii) Pawan Alloys Casting (P) Ltd. Vs U.P. SED, reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefits under the earlier excise duty exemption/refund scheme but has otherwise no relation to the erstwhile scheme. It is stated that the budgetary scheme will be available for 58% of the Central Tax Paid through debit in the case leisure account maintained by the unit in terms of Section 49(1) of the Central Goods and Service Tax Act, 2017 after utilization of the input tax credit of the central tax and integrated tax and 29% of the integrated tax paid through debit in cash leisure account maintained by the unit in terms of Section 20 of the Integrated Goods and Service Act, 2017 after utilization of the input tax credit of Central Tax and Integrated Tax. According to the respondents, the petitioners opted to avail the benefit available under Notification No. 8 of 2003-CE dated 01.03.2003 to get the benefit of exemption from the Central Excise Duty. Since the petitioners did not avail the benefits on the notification and there is no record available with the respondents that the petitioners had approached the respondents to avail the benefits under Notification 20/2007 and since they did not avail the benefits, the question of extending the scheme of budgetary support to them unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of availing benefits as per the Notification No. 8/2003-CE dated 01.03.2003 does not arise at all and thereby the aforesaid contentions made on behalf of the Respondents are totally misconceived. 21. It is submitted that the Petitioners in the present Writ Petitions are not challenging the validity of the Budgetary Support Scheme but have challenged the denial of the benefit of Budgetary Support Scheme to the Petitioners in spite of the fact that the Petitioners are eligible to the said benefits as such rejection of the claim of the petitioners are in complete violation of Article 14 of the Constitution of India. The question which came up for consideration before the Apex Court in Hero Motocrop (Supra) was altogether different than one raised in the present Writ Petitions. The issue which has been raised in the present Writ Petitions was not the subject- matter for consideration before the Apex Court in Hero Motocorp (supra). The Apex Court in Union of India Vs. Arulmozli Arulmozhi reported in (2011) 7 SCC 397 held that the Court should not placed reliance on decision without discussing as to how the fact situation of the case before it fits in the facts situation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits offered thereunder were not claimed at the relevant point in time as their turnover was below the threshold limit or that they were manufacturing items which were exempted under Central Excise. Therefore, there was no occasion for the petitioners to claim these benefits. Under clause 4.1 of the budgetary scheme, eligible unit means a unit which was eligible before the first day of July 2017 to avail the benefit of the ab-initio exemption or exemption by way of refund from payment of central excise duty under notifications. It is submitted that as per the said clause 4.1, this benefit of budgetary support under the scheme would be applicable with reference to the central Excise registration number for the premises of eligible manufacturing unit as it existed prior to migration to GST. The determination of the budgetary support is laid down on the clause 5 of the said scheme. Under the said clause, the sum total of 58% of the central tax paid through debit in the cash ledger account maintained by the unit under section 49 of the CGST Act after utilization of the input tax credit of the Central Tax and Integrated Tax would be the extent of the budgetary support. Insofar as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e granted eligibility certificates. They had established their industries or had expanded their installed capacities by the period specified. They had clearances/NOCs being granted by other connected departments. Under such circumstances, debarring the present petitioners from availing the benefit of budgetary support as compared to those units who were availing exemptions by paying Central excise duty under the NEIIPP, is not a reasonable classification and therefore the same is hit by Article 14 of the Constitution of India. The sole ground for making such a classification in not extending the benefit of budgetary support to the petitioners units, are that they were not paying central excise duty under the NEIIPP. It was urged on behalf of the petitioners that to avail the benefit of NEIIPP, the conditions mentioned in the policy, namely that the industry must be set up or their installed capacity be increased within the cutoff date in the Northeast region and that they satisfied all the eligibility criteria. On the basis of the applications made by the petitioners and upon due assessment of their conditions, they were granted eligibility certificate pursuant to which the industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd contrary to the promise held out to these industries like the petitioner for encouragement of development of industries in the various areas, including the Northeastern region. Under such circumstances, the respondent authorities cannot be permitted to create an artificial classification which has no nexus with the object sought to be achieved. 29. The object sought to be achieved is to provide financial support/ budgetary support to all those industries availing area based exemptions. Such area based exemptions to be availed of are permissible only upon such industry fulfilling the requirements specified under the policy of NEIIPP. Once this criteria is satisfied by any industry, then all benefits under the scheme, including central excise exemption benefit, will be available for the entire period of the promise made, namely for a period of ten years. With the advent of the GST regime, the central excise law came to be subsumed into the GST and consequently there is no separate duty of central excise. The units are required to pay GST which includes a portion of the central excise duty which was earlier paid by those industries whose turnover was beyond the threshold limit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in clause 4, there is no mention of the notification 20/2007-CE dated 25.04.2007 and as such, the petitioner units are not entitled to the benefit of scheme of budgetary support. The respondents submit that the budgetary support scheme is not supported by any statute. It is a policy decision taken by the Government of India to give support to the units who are paying central excise duty and claiming exemptions under the erstwhile NEIIPP policy. Since the units of the petitioners were not even registered under central excise or were required to pay central excise duty by virtue of their annual turnover being below the threshold limit of 1.5 crores, they had never paid any central excise duty. Consequently, with the advent of GST, they are now required to pay the GST as per the provisions of the GST statute. The Government of India took a policy decision to provide some benefit to those industries only who were paying central excise duty and claiming exemptions under the erstwhile central excise laws prior to the GST regime. Under such circumstances, the decision not to offer budgetary support to the petitioner units cannot be faulted with. The petitioner units and the other units w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenge in the present proceeding is to the denial of extending the benefit of budgetary support scheme. Although the petitioner industrial units are all eligible for the excise duty exemption under the industrial policy announced by the Government of India and the consequent central excise notifications, but this benefit has been denied to the petitioner industrial units on an artificial classification made by the respondent authorities that the budgetary support scheme is to be provided to only those industrial units who were paying Central Excise Duty and claiming exemptions. This classification is unreasonable and has no nexus to the objects sought to be achieved, as the entire benefit conferred by the Government of India through the budgetary support appears to be towards the central excise duty which was paid by those industrial units under the industrial policy prior to the GST regime. However, with effect from 01.07.2017 pursuant to the GST regime, there is no distinction or component of central excise which can be curved out of the GST tax required to be paid by the industrial units. If the classification is based on only the payment of central excise duty earlier by the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted at Paragraph-2 above, the petitioners listed at Sl. Nos. 1 to 6 fall under category (a) above, namely, those manufacturing units whose turnover was below the threshold limit under the Central Excise Act, 1944 prior to the introduction of the Goods and Service Tax Act, 2017 with effect from 01.07.2017 and thereby were not registered under the Central Excise Act, 1944 but became liable to payment of goods and service tax after 01.07.2017. The petitioners at Sl. Nos. 7 to 14 in the Chart at Paragraph-2 fall under Category (b) namely, those units who were manufacturing exempted goods under the Central Excise Act, 1944 prior to the introduction of the Goods and Service Tax Act, 2017 and thereby were not registered under the Central Excise Act, 1944 but became liable to payment of goods and service tax after 01.07.2017. 35. Before proceeding further, it is apposite to refer to the Industrial Policies announced by the Government of India, the Government of India by the office Memorandum dated 24.12.1997 announced the new industrial policy and other concessions in the Northeastern region. Under the fiscal incentives announced, it was mentioned that the Government has approved for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy inter alia also included excise duty exemption. Under the said policy, 100% of the excise duty exemption will be continued on the finished products made in the northeastern region as was available under the earlier industrial policy of 1997. The said NEIIPP also provided for a negative list specifying the industries which will not be eligible for benefits under NEIIPP of 2007. Although the petitioner units established their units and commenced production from such units or from such expanded units, they were either manufacturing goods which were already exempted from excise duty or their turnover fell below the threshold limit of 1.5 crores. Consequently, none of the petitioners at the relevant point in time were required to pay excise duty and claim their refunds. However, the requirement of fulfilling the criteria for being considered eligible for the fiscal incentives under both the NEIP, 1997 as well the NEIIPP, 2007. However, since they were not required to pay the excise duty because of the reasons mentioned above, there was no occasion for them to claim any exemption. 37. Pursuant to the Government bringing in the GST Law, several taxes including central excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h have given rise to the controversy which are the subject matters of the present proceedings namely: (a) Notification No. 5th October, 2017 whereby the scheme of budgetary support under Goods and Service Tax Regime to the units located in State of Jammu Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim; and (b) Circular No. 1068/1/2019-CX dated 10th January, 2019 whereby the review of progress of implementation of Scheme of Budgetary Support to eligible industrial units located in States of Jammu Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim. (i) The Notification dated 5th October, 2017 is extracted below: MINISTRY OF COMMERCE INDUSTRY (Department of Industrial Policy and Promotion) NOTIFICATION New Delhi, the 5th October, 2017 Subject : Scheme of budgetary support under Goods and Service Tax Regime to the units located in States of Jammu Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim. F. No. 10(1)/2017-DBA-II/NER. In pursuance of the decision of the Government of India to provide budgetary support to the existing eligible manufacturing units opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of indirect tax under any existing tax incentive scheme of Central or State Governments shall not continue under the GST regime and the concerned units shall be required to pay tax in the GST regime. The Council left it to the discretion of Central and State Governments to notify schemes of budgetary support to such units. Accordingly, the Central Government in recognition of the hardships arising due to withdrawal of above exemption notifications has decided that it would provide budgetary support to the eligible units for the residual period by way of part reimbursement of the Goods and Services Tax, paid by the unit limited to the Central Government s share of CGST and/or IGST retained after devolution of a part of these taxes to the States. 4. DEFINITIONS 4.1 Eligible unit means a unit which was eligible before 1st day of July, 2017 to avail the benefit of ab-initio exemption or exemption by way of refund from payment of central excise duty under notifications, as the case may be, issued in this regard, listed in para 2 above and was availing the said exemption immediately before 1st day of July, 2017. The eligibility of the unit shall be on the basis of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Goods and Services Act, 2017 the amount i.e. sum total of (i) (ii) above shall be reduced by the same percentage as is the percentage value of inputs procured under Composition scheme out of total value of inputs procured. Explanation :- Explanation-I A Sum total worked out under clause (i) (ii) Rs. 200 B Percentage value of inputs procured under Composition Scheme out of total value of inputs procured 20% C Admissible amount out of (a) above Rs (200-20% of 200)= Rs. 160 Explanation-II (a) Calculation of (ii) shall be followed by calculation of (i) (b) To avail benefit of this scheme, eligible unit shall first utilize input tax credit of Central tax and Integrated tax and balance of liability, if any, shall be paid in cash and where this condition is not fulfilled, the reimbursement sanctioning officer shall reduce the amount of budgetary support payable to the extent credit of Central tax and integrated tax, i s not utilized for payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the copy of last monthly/quarterly return for production and removal of goods under exemption notification of the Department of Revenue. (d) An Affidavit-cum-indemnity bond, as per Annexure-A, to be submitted on one time basis, binding itself to pay the amount repayable under para 9 below. Any other document evidencing the details required in clause (a) to (c) may be accepted with the approval of the Commissioner. 5.8 For the purpose of this Scheme, manufacture means any change(s) in the physical object resulting in transformation of the object into a distinct article with a different name or bringing a new object into existence with a different chemical composition or integral structure. Where the Central Tax or Integrated Tax paid on value addition is higher than the Central Tax or Integrated Tax worked out on the value addition shown in column(4) of the table below, the unit may be taken up for verification of the value addition: TABLE Serial No. Chapter Description of goods Rate (%) Description of inputs for manufacture of goods in column (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All goods 36 Any goods 18. 85 Electric motors and generators, electric generating sets and parts thereof 31 Any goods 19. Any chapter Goods other than those mentioned above in S. Nos. 1 to 18 36 Any goods Explanation : For calculation of the value addition the procedure specified in notification no 01/2010-CE dated 06.02.2010 of the Department of Revenue as amended from time to time shall apply mutatis-mutandis. 5.9.1 In cases where an entity is carrying out its operations in a State from multiple business premises, in addition to manufacture of specified goods by the eligible unit, under the same GST Identification Number (GSTIN) as that of the eligible unit, the eligible unit shall submit application for reimbursement of budgetary support alongwith additional information, duly certified by a Chartered Accountant, relating to receipt of inputs, input tax credit involved on the inputs or capital goods received by the eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be, after such examination of the application as may be necessary, shall sanction reimbursement of the budgetary support. The sanctioned amount shall be conveyed to the applicant electronically. The PAO, CBEC will sanction and disburse the recommended reimbursement of budgetary support. 8. BUDGETARY PROVISION AND PAYMENT OF AMOUNT OF BUDGETARY SUPPORT 8.1 The budgetary support shall be disbursed from budgetary allocation of Department of Industrial Policy Promotion (DIPP),Ministry of Commerce Industry. DIPP shall keep such budgetary allocation on the disposal of PAO, CBEC. The eligible units shall obtain one time registration on the ACES-GST portal and obtain a unique ID which is to be used for all processing of claims under the scheme. The application by the eligible unit for reimbursement of budgetary support shall be filed on the ACES-GST portal with reference to unique ID obtained and shall be processed by the Deputy Commissioner or Assistant Commissioner of the Central Tax for sanction of the admissible amount of budgetary support. 8.2 The application for imbursement of budgetary support shall be made by the eligible unit after the payment of CGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner or Deputy Commissioner of Central Taxes, as the case may be. 9.3 The procedure for recovery: Where any amount is recoverable from a unit, the Assistant Commissioner or Deputy Commissioner of Central Tax, as the case may be, shall issue a demand note to the unit (i) intimating the amount recoverable from the unit and the date from which interest thereon is due and (ii) directing the manufacturer to deposit the full sum within 30 days of the issue of the demand note in the account head of DIPP and submit proof of deposit to him/her 9.4 Where the amount is not paid by the beneficiary within the time specified as above, action for recovery shall be taken in terms of the affidavit cum- indemnity bond submitted by the applicant at the time of submission of the application, in addition to other modes of recovery. 9.5 Where any amount of budgetary support and/or interest remains due from the unit, based on the report sent by the Assistant Commissioner or Deputy Commissioner of Central Tax as the case may be, the authorized officer of DIPP shall, after the lapse of 60 days from the date of issue of the said demand note take required legal action and send ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f excise duty was imposed at a later date. 2. The scheme seeks to provide benefit to the eligible units for the residual period which were availing exemption under erstwhile exemption notifications issued under Central Excise regime, As such the benefit would not be available to such units. Procurement of inputs for supply as a part of Kit A cosmetics manufacturer has sought clarification as to whether its hair colour kit, would be considered as manufacture. The kit consist of colourant tube manufactured in their own factory at Baddi and other items manufactured by third parties situated in area based exempt locations and are procured to be part of the kit. This finished hair colour kit is cleared by their factory. 3. As long as, the sourced goods from third party are in the nature of inputs for the kit in respect of which some of the goods are being manufactured by themselves, the kit would be considered to be a product which is being supplied. The benefit for the kit would be available so long as the sourced products are in the nature of inputs/accessories and are supplied in form of kit in general trade parlance for such goods. Multiple business premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claims should be disposed off within 2 weeks since the applicant has already incurred liability and paid the tax and in no case, it should be later than 30 days. Jurisdictional Chief Commissioner is to monitor the same and ensure expeditious disposal. Insistence on ink signed copy by PAO, of sanction order, creates delay in the sanction of refund. It was suggested that there should not be any requirement of ink signed copy of the sanction order to the PAO by the DC/AC especially in areas where Commission rates are located in far flung areas. 8. It was clarified that in the manual mode there is a requirement for the same. However, in the automated mode after roll out of the third phase of the automation, there will not be any requirement of ink signing of the sanction order. Provision for appeal: There is no provision for appeal for the unit in case the unit is aggrieved with the findings of sanctioning authority / Inspection team. 9. The support under the scheme is in the nature of grant and not refund of duty under taxation law. As such there is no requirement for any appellate forum as the decision of the sanctioning authority is final. Verificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the state of Himachal Pradesh and Uttarakhand, the eligible industrial units were exempted from whole of the duty of excise or additional duty of excise as the case may be leviable thereon. Since the excise duty and additional excise duty was totally exempted in respect of the goods cleared by eligible industrial units in the State of Himachal Pradesh and Uttarakhand, the said eligible industrial units were not required to be registered under the Central Excise Act. Keeping in view the position as reflected above, though Clause 4.1(a) of the Budgetary Support Scheme provides that the eligibility of the unit shall be on the basis of the application filed for budgetary support under the Budgetary Support Scheme with reference to the Central Excise registration number, for the premises of the eligible manufacturing unit, as it existed prior to migration to GST, Clause 4.1(b) provides for requirement of only GST registration in respect of the industrial units covered by Notification Nos. 49/2003-CE dated 10.06.2003 and 50/2003-CE dated 11.06.2003 where manufacturing activities were carried on prior to 01.07.2017 and the unit was not registered under the Central Excise. The framers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he industrial unit was closed thereafter but again started from 01.08.2017 i.e. after the introduction of the GST, it will not be entitled to the benefit of the Budgetary Support Scheme though the said industrial unit was entitled to the exemption as per the Industrial Policy and Notification No. 20/2007 dated 25.04.2007 for a period of 10 years from the date of the commencement of the production. A similar situation came up before the Tripura High Court in the case of Sukhamoy Paul Vs. State of Tripura Others, reported in 2021 SCC OnLine Tri 273, in respect of the claim of transport subsidy wherein the eligible industrial units after commencing its production got engaged into the same activity as job worker and subsequently was not entitled to the transport subsidy, held as under: .The eligibility period for claiming subsidy may be 5 years, the scheme nowhere provides that only if a new industrial unit continues such manufacturing activity for a period of 5 years that it can claim the transport subsidy. Therefore, even if, as pointed out by the respondents, the petitioner at some later point of time after commencing its production got engaged into the same activity as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established after fulfilling the conditions of the Industrial Policy of 2007 and is an eligible industrial unit for claiming the benefits as provided in the Industrial Policy including the excise benefits as granted by Notification No. 20/2007. In the present set of cases, the industrial units, though eligible for benefits under the Industrial Policy of 2007 in so far as excise benefits was concerned, the said benefit could not be claimed inasmuch as either the goods manufactured were exempted from payment of excise duty or the total turnover of these units were below the threshold limit. On the above two grounds, it cannot be said that the said industrial units were not eligible units for claiming benefits under Notification No. 20/2007. The aforesaid Clarification dated 22.02.2023 reinforces the submission of the petitioners that not claiming of any refund of excise duty as per Notification No. 20/2007 cannot be a ground to hold that the said industrial units were not eligible and/or not availing benefits of Notification No. 20/2007. In view of the aforesaid, the impugned circular dated 10.01.2019 holding that industrial units like that of the petitioner are not eligible for ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e classification two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases; namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure. 47. In Ram Krishna Dalmia Vs. Sri Justice S.R. Tendolkar and Ors, reported in AIR 1958 SC 538. While the examining the validity of a notification issued by the Government of India under the Commission of Inquiry Act, 1952. The earlier judgment of the Apex Court in Budhan Choudhury (Supra) was also considered and the Apex Court examine the decisions of the Apex Court in Budhan Choudhury (Supra) and other Judgments and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, for instance, if the object is to discriminate against one section of the minority the discrimination cannot be justified on the ground that there is a reasonable classification because it has rational relation to the object sought to be achieved. 49. In E.P. Royappa Vs. State of Tamil Nadu, reported in (1974) 4 SCC 3, the Apex Court held that the equality and arbitrariness are sworn enemies . Where the act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14, and if it effects any matter relating to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. They require that State action must be based on valid relevant principles applicable alike to all similarly situate and it must not be guided by any extraneous or irrelevant considerations because that would be denial of equality. Where the operative reason for State action, as distinguished from motive inducing from the antechamber of the mind, is not legitimate and relevant but is extraneous and outside the area of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation sought to be made by the government that that all other patent or proprietary medicinal preparations belonging to different systems of medicine were taxed at the rate of 7%. Only, arishtams prepared under the Ayurvedic system were made subject to a levy of 30%. Arishtams and Asavas contained alcohol which are essential for effective and easy absorption of the medicine by the human system and also because it acted as preservative. This classification was negated by the Apex Court on the ground that it is not based on a reasonable classification. 54. While examining the decision in Ayurveda Pharmacy (Supra), the Apex Court in Associated Cement Companies Ltd. vs. Government of Andhra Pradesh, (2006) 1 SCC 597, observed as under: 29. In Ayurveda Pharmacy v. State of T.N. [(1989) 2 SCC 285 : 1989 SCC (Tax) 273] which is the sheet anchor of the appellants' submission the facts were: that the appellants were manufacturers of ayurvedic drugs and medicines, including arishtams and asavas. Arishtams and asavas contain alcohol, which according to the assessee was essential for the effective and easy absorption of the medicine by the human system and also because it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the Apex Court laid down certain propositions culled out from these judgments in respect of the principle applicable and arising under Article 14 of the Constitution of India. Those propositions may be stated thus: (1) The first part of Article 14, which was adopted from the Irish Constitution, is a declaration of equality of the civil rights of all persons within the territories of India. It enshrines a basic principle of republicanism. The second part, which is a corollary of the first and is based on the last clause of the first section of the Fourteenth Amendment of the American Constitution, enjoins that equal protection shall be secured to all such persons in the enjoyment of their rights and liberties without discrimination of favouritism. It is a pledge of the protection of equal laws, that is, laws that operate alike on all persons under like circumstances. (2) The State, in the exercise of its governmental power, has of necessity to make laws operating differently on different groups or classes of persons within its territory to attain particular ends in giving effect to its policies, and it must possess for that purpose large powers of distinguishing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that that differentia must have a rational relation to the object sought to be achieved by the Act. (8) The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them. In short, while Article 14 forbids class discrimination by conferring privileges or imposing liabilities upon persons arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legislation, provided such classification is not arbitrary in the sense abovementioned. (9) If the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body of administr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural rights for relief and for defence with like protection and without discrimination. 58. In Subramanian Swamy Vs. Director, CBI, reported in (2014) 8 SCC 682 , the Apex Court examined the principles applicable to Article 14 held as under: 38. Article 14 reads: 14. Equality before law. The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. The first part of Article 14, which was adopted from the Irish Constitution, is a declaration of equality of the civil rights of all persons within the territories of India. It enshrines a basic principle of republicanism. The second part, which is a corollary of the first and is based on the last clause of the first section of the Fourteenth Amendment of the American Constitution, enjoins that equal protection shall be secured to all such persons in the enjoyment of their rights and liberties without discrimination of favouritism. It is a pledge of the protection of equal laws, that is, laws that operate alike on all persons under like circumstances [(1979) 1 SCC 380] 39. Article 14 of the Constitution incorporates concept of equality an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation may be founded on different bases; namely, geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure. 41. In Ram Krishna Dalmia [ Ram Krishna Dalmia v. S.R. Tendolkar, AIR 1958 SC 538 : 1959 SCR 279 ] , the Constitution Bench of five Judges further culled out the following principles enunciated in the above cases: (AIR pp. 547-48, para 11) 11. (a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presumed that the legislature understand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bly regarded as based upon some differentia which distinguishes such persons or things grouped together from those left out of the group and whether such differentia has a reasonable relation to the object sought to be achieved by the statute, no matter whether the provisions of the statute are intended to apply only to a particular person or thing or only to a certain class of persons or things. Where the court finds that the classification satisfies the tests, the court will uphold the validity of the law. (ii) A statute may direct its provisions against one individual person or thing or to several individual persons or things but no reasonable basis of classification may appear on the face of it or be deducible from the surrounding circumstances, or matters of common knowledge. In such a case the court will strike down the law as an instance of naked discrimination . (iii) A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of legislation [and] that the classification in order to be reasonable must satisfy two tests: (i) the classification must be founded on intelligible differentia, and (ii) the differentia must have a rational relation with the object sought to be achieved by the legislation in question. The Court emphasised that in this regard object itself should be lawful and it cannot be discriminatory. If the object is to discriminate against one section of the minority, the discrimination cannot be justified on the ground that there is a reasonable classification because it has rational relation to the object sought to be achieved. 45. The constitutionality of the Special Courts Bill, 1978 came up for consideration in Special Courts Bill, 1978, In re [(1979) 1 SCC 380] as the President of India made a reference to this Court under Article 143(1) of the Constitution for consideration of the question whether the Special Courts Bill or any of its provisions, if enacted would be constitutionally invalid. The seven-Judge Constitution Bench dealt with the scope of Article 14 of the Constitution. Noticing the earlier decisions of this Court in Budhan Choudhry [Budhan Choudhry v. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded as a class for purposes of legislation and in relation to a law enacted on a particular subject. This power, no doubt, in some degree is likely to produce some inequality; but if a law deals with the liberties of a number of well-defined classes, it is not open to the charge of denial of equal protection on the ground that it has no application to other persons. Classification thus means segregation in classes which have a systematic relation, usually found in common properties and characteristics. It postulates a rational basis and does not mean herding together of certain persons and classes arbitrarily. (6) The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience. It can recognise even degree of evil, but the classification should never be arbitrary, artificial or evasive. (7) The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sarily a discriminatory power. (11) Classification necessarily implies the making of a distinction or discrimination between persons classified and those who are not members of that class. It is the essence of a classification that upon the class are cast duties and burdens different from those resting upon the general public. Indeed, the very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. (12) Whether an enactment providing for special procedure for the trial of certain offences is or is not discriminatory and violative of Article 14 must be determined in each case as it arises, for, no general rule applicable to all cases can safely be laid down. A practical assessment of the operation of the law in the particular circumstances is necessary. (13) A rule of procedure laid down by law comes as much within the purview of Article 14 as any rule of substantive law and it is necessary that all litigants, who are similarly situated, are able to avail themselves of the same procedural rights for relief and for defence with like protection and without disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom a positivistic point of view, equality is antithetic to arbitrariness. In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14, and if it affects any matter relating to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment. 59. After elaborate discussion of the earlier judgments, the Apex Court culled out the principle which should be adopted by the courts for application of the principle of Article 14. The Apex Court held that Where there is challenge to the constitutional validity of a law enacted by the legislature, the Court must keep in view that there is always a presumption of constitutionality of an enactment, and a clear transgression of constitutional principles must be shown. The fundamental nature and importance of the legislative process needs to be recognised by the Court and due regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discrimination that although in the field of taxation, the legislature has an extremely wide discretion to classify items for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes (see State of Madras v. P.R. Sriramulu [(1996) 1 SCC 345]). However, at the same time, when a substantive unreasonableness is to be found in a taxing statute/notification, it may have to be declared unconstitutional. Although the Court may not go into the question of a hardship which may be occasioned to the taxpayers but where a fair procedure has not been laid down, the validity thereof cannot be upheld. A statute which provides for civil or evil consequences must conform to the test of reasonableness, fairness and non-arbitrariness. 62. In State of Jharkhand Vs. Tata Cummins Ltd., reported in (2006) 4 SCC 57, in respect of the principle for interpretation of exemption notification, the Apex Court held that an exemption notification under an enactment law has to be construed strictly. However, any exemption notification issued for implementing an industrial policy of the state which had promised exemption for setting up new industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons have altered their position to their prejudice. The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contracts by a person who acts upon the promise: when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation may if the contract be not in that form be enforced against it in appropriate cases in equity. In Union of India v. Indo-Afghan Agencies Ltd. [(1968) 2 SCR 366] this Court held that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice, relying upon the representations as to its future conduct made by the Government. The Apex Court also observed that in appeal from that judgment ( Howell v. Falmouth Boat Construction Co. Ltd .) Lord Simonds observed after referring to the observations of Denning, L.J.: The illegality of an act is the same whether the action has been misled by an assumption of authority on the part of a Government officer however high or low in the hierachy. * * * The question is whether the character of an act done in for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med against a statute. In order to claim the benefit of promissory estoppel the appellants must establish: (i) that a representation was made to grant the exemption for a particular period to a new industry established in view of the representation held out by the State Government; and (ii) that the appellants had established the new industry acting upon the representation made by the State Government. 68. In Pawan Alloys Casting Pvt. Ltd, Meerut Vs. U.P. State Electricity Board and Ors, reported in (1997) 7 SCC 251 , the Apex Court held that the it may be found that the Government or any other competent authority had held out any promise on the basis of which the promise might have acted, if public interest required recall of such a promise and such a public interest outweighed the interest of the promise then the doctrine of promissory estoppels against the Government would lose its rigor and cannot be of any avail to such promisee. The Apex Court also held that they have neither expressly nor impliedly agreed that the Board will have absolute power and discretion to withdraw this incentive of development rebate at any time prior to the expiry of three years for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. The withdrawal of exemption in public interest is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the public interest . The courts, do not interfere with the fiscal policy where the Government acts in public interest and neither any fraud or lack of bona fides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interest while issuing or modifying or withdrawing an exemption notification under Section 25(1) of the Act. It needs no emphasis that the power of exemption under Section 25(1) of the Act has been granted to the Government by the Legislature with a view to enabling it to regulate, control and promote the industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Jharkhand and Ors. Vs. Brahmaputra Metallics Ltd., Ranchi and Anr, reported in 2020 SCC OnLine SC 968 , the Apex Court held that the scope of the doctrine of legitimate expectation is wider than promissory estoppel because it not only takes into consideration a promise made by a public body but also official practice, as well. Further, under the doctrine of promissory estoppel, there may be a requirement to show a detriment suffered by a party due to the reliance placed on the promise. Although typically it is sufficient to show that the promisee has altered its position by placing reliance on the promise, the fact that no prejudice has been caused to the promisee may be relevant to hold that it would not be inequitable for the promisor to go back on their promise. However, no such requirement is present under the doctrine of legitimate expectation. The doctrine of legitimate expectation cannot be claimed as a right in itself, but can be used only when the denial of a legitimate expectation leads to the violation of Article 14 of the Constitution. 74. Food Corporation of India Vs. M/s Kamdhnu Cattle Feed Indusries, reported in (1993) 1 SCC 71, the Apex Court that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitrary manner contradicts the principle of legitimate expectation. An authority is under a legal obligation to exercise the power reasonably and in good faith to effectuate the purpose for which power stood conferred. In this context, in good faith means for legitimate reasons . 76. In this context, it is also trite to refer to another important judgment of the Apex Court rendered in Manuelsons Hotels Private Limited Vs. State of Kerala, reported in (2016) 6 SCC 766. In that case, the State Government of Kerala offered certain fiscal incentives as tourism was declared to be an industry . These fiscal incentives that were promised included exemption from building tax levied by the Revenue Department of the State of Kerala. There was a Government order whereby it was proposed to amend the Kerala Building Tax Act 1975. Pursuant to the said promise and the subsequent Government order issued by the Government, the petitioners took all steps necessary to construct their hotels. Subsequently, notices for filing returns under the Kerala Building Tax Act was issued to the said petitioners and which however, they declined to furnish on the ground that as per the Promise given by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation. 3. Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party. 4. The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party: (a) has induced the assumption by express or implied representation; (b) has enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined on the basis of the existence of that fact or state of affairs. In some cases, the estoppel may operate to fashion an assumed state of affairs which will found relief (under ordinary principles) which gives effect to the assumption itself (e.g. where the defendant in an action for a declaration of trust is estopped from denying the existence of the trust). 8. The recognition of estoppel by conduct as a doctrine operating consistently in law and equity and the prevalence of equity in a Judicature Act system combine to give the whole doctrine a degree of flexibility which it might lack if it were an exclusively common law doctrine. In particular, the prima facie entitlement to relief based upon the assumed state of affairs will be qualified in a case where such relief would exceed what could be justified by the requirements of good conscience and would be unjust to the estopped party. In such a case, relief framed on the basis of the assumed state of affairs represents the outer limits within which the relief appropriate to do justice between the parties should be framed. (emphasis supplied) 78. The Apex Court went on to hold that between the English Law and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent will be under a bounden duty to justify as to why they had to resile from the promises made earlier. However, in the present case, this Court is not called upon to decide the question of the correctness of the government's decision vis- - vis its position earlier as is reflected under the industrial policy resolution. In the context of the present proceedings, the question which is to be decided is whether the decision of the government and the respondent authorities in excluding the present petitioners from being extended the benefit of the budgetary support scheme is violative of Article 14 as the same is stated to be not based on a reasonable classification. From the elaborate pleadings on record and the extensive submissions made by the learned counsels for the parties, it is clear that the basis for grant of the benefit of the budgetary support scheme are only to those industries who had paid the Central Excise Duty and were registered under Central Excise Act and had claimed the exemptions offered under the industrial policy. It is also seen that this budgetary scheme is not a part of any statute. It is a policy decision taken by the government. The reasons for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reshold limit of 1.5 crores and thereby they are not required to pay any Central Excise Duty as per the law as it existed then. The other group of petitioners produce items which are already exempted under the erstwhile Central Excise Law and were therefore not required to pay any duty and consequently there was no necessity for claiming any exemption offered under the NEIIPP. These facts are not disputed by the respondents. Consequently, notwithstanding that these petitioners fall into these two categories, they were considered to be eligible industries to avail the benefits under the NEIIPP subject to their necessity and requirement of payment of the excise duty. With effect from 01.07.2017, the GST had subsumed many of the taxes, including central excise. All industries and units including the present petitioners were required to be registered under the GST laws. As it stands today, the petitioners are registered assessees under the GST laws and they are required to pay GST. The industries which have been granted the budgetary support scheme also stand on the same footing, namely that they are also registered under the GST and are required to pay the taxes under the GST. As disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of under the GST Laws. Therefore, as on date, all the petitioners are also admittedly paying GST on the grounds which were earlier exempted or excluded from payment of Central Excise. As such denial of the benefit of Budgetary Support cannot be supported by any reasonable clarification which was made by the respondents to offer the financial support to Industries/units who were considered eligible to avail the benefits under the NEIIPP cannot be held to be valid in law. Such classification to exclude units/industries who were not paying Central Excise duty earlier is opposed to the very purpose of the Industrial Policies and also contrary to the Budgetary Support scheme itself as is evident from the recital in the Circular dated 27.11.2007. 82. Under such circumstances, the criteria evolved by the Government of India to grant to extend the benefit of budgetary support scheme only to those units who had paid central excise duty and claimed exemption under the erstwhile Central Excise Act could have been a valid classification had this scheme been introduced prior to the introduction of GST. Post introduction of GST, there is no concept of Central Excise Duty. All these duties h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered to be eligible industries to avail the benefits as applicable and as conferred under the NEIIPP. 85. The judgment of the Apex Court in Hero Motocrop (Supra), relied upon by the respondents, had upheld the validity of budgetary scheme support. However, the question of the manufacturing units, like the petitioners, who, although were eligible to avail the benefits under the industrial policies, were not required to avail those benefits by virtue of their manufactured goods being exempted or their turnover fell below the threshold limit, was not at all an issue before the Apex Court in the said Judgment. The issue before the Apex Court was the validity of the budgetary scheme and which was upheld by the Apex Court. The Apex Court however although rejected the challenge made to the validity, however, permitted the petitioners therein to approach the authorities for filing necessary applications for revealing their benefits. In view of the discussions made above, the other judgments referred by the respondents, regarding the interpretation of exemption notification does not come to the aid of the respondents as this Court has come to a finding that the budgetary scheme its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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