9911796707
TMI Blog1992 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ost importation charges including customs duty and surcharge to the value of the goods imported by first petitioner company for the purpose of levying the countervailing duty (C.V.D.) under Section 3(1) of the Customs Tariff Act, 1975 and surcharge; and (g) issue a writ of prohibition or any other appropriate writ, order or direction prohibiting the respondents from loading the assessable value as set out in the prayers hereinabove. 2. However, Shri Korde, the learned Counsel appearing for the petitioners fairly stated that as far as the reliefs claimed in the above terms by prayers (d), (e), (f) and (g) of the petition are concerned, the issues are concluded against the petitioners in view of two Division Bench judgments of this court in the case of (i) Ashok Traders v. Union of India and Another, reported in 1987 (32) E.L.T. 262 (Bombay) and (ii) Polyset Corporation and Others v. Collector of Customs, Bombay and Another, reported in 1985 (21) E.L.T. 48 (ombay). In view of this position, it is not necessary for us to cool with these contentions which have, admittedly, been concluded against the petitioners by the said two decisions referred to above. However, what survives for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under the Tariff Act in respect of the import of the PVC resins from Romania. 4. The petitioners stated that on the basis of the representations contained in the aforesaid notification, Exh. C, they entered into four contracts, all dated 26th July 1982 with M/s. P.D. Dastur, Bombay, an indenting agent of Chimimport Export, Foreign Trade Co., (A Government of Romania Organisation) of Romania for import of 5000 metric tonnes of PVC resins. On 28th August 1982 the Union Bank of India opened a letter of credit in favour of the said supplier at the instance of the first petitioner. The supplier from Romania issued the invoice dated 9th December 1982 and the Bill of Lading in respect of the said goods is dated 10th December 1982. On reaching India, the vessel was granted entry inwards on 29th December 1982 and Bill of Entry in respect of the goods entered for home consumption under Section 46 of the Customs Act, 1962 was presented on December 30,1982. There is no controversy before us that for the purpose of Section 15(1)(a) of the Customs Act, 1962 me relevant date for the purpose of rate of duty and Tariff valuation in respect of the imported goods would be December 30,1982. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entation and promise made by the respondents in the said notification, Exh. C, was binding upon the respondents and they were not entitled to go back upon the same and it would be inequitable to permit the respondents to go back upon the said promise having regard to the dealings which had taken place between the parties. In the Petition, the petitioners have made specific averment setting out the ingredients of the doctrine of promissory estoppel which, according to the petitioners, have been fully satisfied in the facts of the present case. In support of his contention that it was not open to the respondents to withdraw the promise and representation made in the notification, Exh. C, dated 28th February 1982 Shri Korde has invited our attention to the following decisions. 7. In the case of M/s. Motilal Padampat Sugar Mills Co. Ltd. v. The State of Uttar Pradesh and Others, reported in A.I.R. 1979 Supreme Court 621, a news item was published in the local newspaper which stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under certain provisions of U.P. Sales Tax Act to new industries. The news item was based upon a sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, there can be no promissory estoppel against the legislature in the exercise of its legislative functions nor can the government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition It was equally true that promissory estoppel cannot be used to compel the government or public authority to carry out the representation or promise which was contrary to law or if it was outside the authority or power of the officer of the Government or public authority to make. It was further held that the doctrine of promissory estoppel being an equitable doctrine, must yield when equity so demands. The Court would not raise any equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the government or public authority in such a situation Doctrine of promissory estoppel would be misplaced in such a case, because on facts, equity would not require that the government or public authority may be held bound by the promise or representation made by it. 9.In the case of Pournami Oil Mills v. State of Kerala, reported in A I R 1987 Supreme Court 590 = 1987 (27) E.L.T. 594 (S.C.) it was observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellants had acted upon the first notification and had imported the goods but since the goods had reached Bombay subsequent to the date of second notification, the appellants were called upon to pay the additional duty at the rate of Rs. 2.37 per kg. as against the concessional rate of Rs. 1.32 per kg. which would have been the rate but for the issuance of the second notification. The learned Single Judge had rejected the plea raised on behalf of the appellants. However, on an appeal, the Division Bench of this Court accepted the contention of the appellants based upon the plea of promissory estoppel and further held that the plea of promissory estoppel could be sustained having regard to the equities of the case. Bharucha J. (as he then was) reviewed the law on the subject as laid down in the case of (i) Union of India and Others v. M/s. Anglo Afghan Agencies etc., A.I.R. 1968 Supreme Court 718; (ii) M/s. Motilal Padampat Sugar Mills Co. Ltd. v. The State of Uttar Pradesh and Others, A.I.R. 1979 Supreme Court 621; (iii) Union of India and Others v. Godfrey Philips India Ltd., A.I.R.1986 Supreme Court 806 = 1985 (22) E.L.T. 306 (S.C.), and (iv) Pournami Oil Mills etc. v. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of production, it was held that the plea of promissory estoppel was available to the appellant. The Division Bench observed thus at Para 24 on Page 51 of the report : "24. The judgment in Pournami Oil Mills' case leaves us in no doubt and we must hold that the plea of promissory estoppel is available to the appellants". 12. It must be borne in mind that in case of Bharat Commerce Industries before the Division Bench the notification was issued under Section 25(1) of the Act and it was specifically stated that it would be in force upto and inclusive of 31st December 1979. This was a representation made in the first notification of 05-01-1979 and the exemption and/or concession was sought to be withdrawn by the second notification, issued in a like manner on 30-10-1979. Both in Pournami Oil Mills' case before the Supreme Court as also in the case of Bharat Commerce Industries before the Division Bench of this Court, the exemption granted was specifically stated to be for a particular period of time and relying upon such representation, the parties had entered into certain contracts. It was in these peculiar circumstances that the Division Bench in Bharat Commerce Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Korde that withdrawal of the concession granted under notification, Exh. "C", was arbitrary and hence, the impugned notification, Exh. "F", was liable to be struck down as being arbitrary. 15. As against this, Shri Bulchandani, the learned Counsel appearing on behalf of the respondents has, first, invited our attention to the provisions of Section 25 of the Customs Act, 1962 dealing with the power to grant exemption from duty. According to the learned Counsel, it is left to the subjective satisfaction of the Central Government, if it was satisfied that it was necessary in the public interest to do so, to issue an exemption notification exempting generally, either absolutely or subjective to such condition as may be Specified in the notification, the goods of any specified description from the whole or any part of the duty of customs leviable thereon. Shri Bulchandani contended that the issuance of the notification, Exh. "C", was in exercise of the powers conferred by sub-section (1) of Section 25 of the Act. Similarly, the impugned notification, Exh. "F", has also been issued in exercise of the powers conferred by sub-section (1) of Section 25 of the said Act. Notification, Exh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption granted under the first notification was clearly for a stated period unlike the facts of the present case where the exemption under the notification, Exh. "C", is not for a stated period. He, therefore, contended that the ratio of the decision of the Supreme Court in Pournami Oil Mills' case and the ration of the decision of this Court in Bharat Commerce Industries' case can have no application to the facts of the present case. 17. Shri Bulchandani further contended that as far as the Supreme Court decision in M.P. Sugar Mills' case was concerned, it was not a case of the exercise of the legislative powers of the State but admittedly this was a case of granting a sales tax holiday for a period of three years and this position was confirmed by the Director of Industries as also the Chief Secretary of the State of Uttar Pradesh. The plea of promissory estoppel was, therefore, not advanced against any legislative action of the State but merely against the subsequent withdrawal by the State in the exercise of its executive powers. Similarly, in the case of Godfrey Philips, the Supreme Court was dealing with a representation in a letter dated 24-05-1976 written by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the observations appearing in Para 9 of the judgment at page 146 of the report which read as under : "Viewed from another perspective, it may be noticed that the State Government was under no obligation to grant exemption from sales tax. The appellants could not, therefore, have insisted on the State Government granting exemption to them from payment of sales tax. What consequently follows is that the exemption granted by the Government was only by way of concession. Once this position emerges it goes without saying that a concession can be withdrawn at any time and no time limit can be insisted upon before the concession is withdrawn. The notifications of the Government clearly manifest that the State Government had earlier granted the exemption only by way of concession and subsequently by means of revised Notification issued on 17-07-1991, the concession had been withdrawn. As the State Government was under no obligation, in any manner known to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent Notification. This is an additional factor militating against the contentions of the appellants". (Emphasis supplied) 19. Shri B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot available to the petitioners, then having regard to the provisions of Section 15(1)(a) of the Customs Act, the relevant date for determination of the rate of duty and tariff valuation in respect of the imported goods would be the date of entry of the vessel inwards. He contended that in the present case the vessel was granted entry inwards on 29th December 1982. The impugned notification, Exh. "F", has been issued on 4th November 1982 and hence, the relevant date for determination of the rate of duty and tariff valuation in accordance with clause (a) of sub-section (1) of Section 15 would be 29th December 1982. In support of his contention, he sought to place reliance on the Supreme Court decision in the case of Bharat Surfactants (Put.) Ltd. v. Union of India, reported in 1989 (43) E.L.T. 189. 22. Having considered the rival contentions in the light of the several decision referred to above. On the first point as to whether the plea of promissory estoppel is available to the petitioners, our answer is in the negative. We are inclined to accept the submission of Shri Bulchandani. As stated earlier, the exemption notification, Exh. "C", dated 28-02-1982 is not for a stated peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entation against the government or public authority. The doctrine of promissory estoppel would be displaced in such a case, because on the facts, equity would not require that the Government or public authority should be held bound by the promise or representation made by it. This aspect has been dealt with fully in Motilal Sugar Mills' case (supra) and we find ourselves wholly in agreement with what has been said in that decision on this point." (Emphasis supplied) Thus, in our view the ratio of the Supreme Court decision either in M.P. Sugar Mills' case or in Supreme Court or of Bharat Commerce and Industries' case before the Division Bench of this Court were materially different in the sense that in both these cases the exemption granted was for a stated period. As stated earlier, there is no controversy before us that in this case the exemption was not for a stated period. We, therefore, approve of the view taken by the learned Single Judge - Variava J., in the case of Sohanlal Shantilal Bros. v. Union of India, reported in 1990 (46) E.L.T. 211 (Bom.). The Division Bench of Madras High Court has also in the case of M. Jamal Company (supra) referred to the distinction betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petition under the interim order dated 11-01-1983, the petitioners were directed to furnish a bank guarantee of a nationalised bank, before clearance of the goods, for the full disputed amount of additional duty plus interest at 9% p.a. There is no controversy that the petitioners had furnished the said bank guarantee. It appears that on an erroneous statement made at the bar that the issues in the Petition were concluded by another judgment, this Writ Petition was dismissed on 13-07-1988. However by an order dated 04-10-1989 passed in Appeal No. 1001 of 1989 the petition was restored for hearing. In the meanwhile, however, the respondents have encashed the bank guarantee on or about the 26th December 1988. Shri Bulchandani states that the respondents have recovered a sum of Rs. 68,50,835. Having regard to the interim order dated 11-01-1983 the respondents are directed to calculate the exact liability of the petitioners with interest at the rate of 9% p.a. from the date of clearance of the goods till the date of encashment of the bank guarantee. The respondents are directed to make the necessary adjustments, if any. If the respondents have recovered anything in excess, they should ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
