| SooperKanoon Citation | sooperkanoon.com/3982 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | Nov-27-1987 |
| Reported in | (1988)LC421Tri(Delhi) |
| Appellant | The TuticorIn Spinning Mills Ltd. |
| Respondent | Collector of Customs |
2. Shri Krishna Mani, learned counsel for the appellants submitted that the appellants would be liable to pay at the concessional rate of Rs. 1.32 per Kg. in respect of the goods imported in terms of Notification No. 8 Customs dated 5-1-1979 as the said notification has been ordered to be in force upto and inclusive of 31-12-1979. It was urged that Notification No. 208 dated 30-10-1979 amending Notification No. 8 to read as Rs. 2.37 per Kg. and substituting 31-12-1980 for the period 31-12-1979 is not legally binding on the appellant. The learned counsel contended that the amending notification enhancing the rate and also substituting the period to the detriment of the appellant would offend the principles of promissory estoppel and, therefore, the impugned order was assailed as bad in law. The learned counsel further contended that the Government cannot rescind its. earlier notification which was to remain in force till 31-12-1979 and enhance the rate of duty by a subsequent notification even before the expiry of the previous one. The learned counsel submitted that even if the principles of promissory estoppel are not applicable against exercise of legislative powers, issuance of a notification and amendment to the same by a subsequent notification is only in exercise of a power of subordinate legislation by a delegated executive authority and, therefore, cannot be construed to be legislative in nature and character so as to deprive the appellants the benefits of the doctrine of promissory estoppel. The learned counsel submitted that there is essential distinction between legislative exercise by the legislature and delegated legislation by the subordinate authority under a delegated power which is only a quasi-legislative in nature. The learned counsel further submitted that the later notification amending the earlier notification to the detriment of the appellants in the facts and circumstances of the case is bad in law and even if a statutory Tribunal being a creature of statute has no authority or jurisdiction to go into the vires of the same; yet on application of the broad principles embodying Article 14 of the Constitution of India the later notification can be so interpreted and construed in favour of the appellant by holding that the rate specified in the earlier notification would be the correct governing rate for the goods imported by the appellant. The learned counsel further submitted that the spirit of the Article 14 of the Constitution is to ensure and safeguard the rights of the persons against arbitrariness and a quasi-judicial authority like the Tribunal should keep this perspective in mind in interpreting the notification in the facts and circumstances of the case. The learned counsel relied upon a number of authorities which we shall advert to at the relevant place.
3. Shri G.V. Naik, the learned 3t. CDR appearing for the respondents submitted that it is a settled proposition of law that the doctrine of promissory estoppel which is founded in equity cannot be invoked by a statutory Tribunal being a creature of statute which is bound by the statute. The learned SDR further submitted that the amending notification is perfectly valid in law and the rate specified thereunder will govern the goods imported by the appellant since on the relevant date when the bill of entry was filed Notification No. 208/79 dated 30th October 1979 was in force. It was, therefore, alleged that the application of the rate of duty under the said notification is statutory in terms of Section 15(i) of the Customs Act 1962. The learned SDR further submitted that issuance of a notification in exercise of a statutory power under Section 25 of the Customs Act 1962, is legislative in nature, and, therefore, the principles of promissory estoppel cannot be invoked. The learned SDR further submitted that legislation by the legislature and exercise of legislative power by public authorities under delegation are both legislative in scope and content and no difference between the two can be adopted vis-a-vis the applicability of the doctrine of promissory estoppel. The learned SDR further submitted that the issue is also squarely covered by the Division Bench ruling of the Andhra Pradesh High Court in the case of Radiant Cables Private Ltd. and Ors. v. Union of India and Ors. vide 1987 (32) ELT 33 (A.P.). The learned SDR also relied upon the ruling of the Division Bench of the Delhi High Court in 3.K. Cotton Spinning and Weaving Mills and Anr. v. Union of India and Ors. vide 1983 (12) ELT 239 (Delhi). The learned SDR also referred to certain other case law which we shall advert to at the relevant place.
4. We have carefully considered the submissions made before us. The short question that arises for our consideration is whether the enhanced rate of duty envisaged by the Customs Notification No. 208/79 dated 30-10-1979 is applicable to the imported goods in question or whether the appellants would be entitled to the concessional rate that was prevalent as per the earlier Notification No. 8 dated 5-1-1979. We would like to refer to certain factual particulars which may be relevant to appreciate the issues involved. Notification No. 8/79 fixing the rate at Rs. 1.32 per Kg. was issued on 5-1-1979 and was to remain in force upto 31-12-1979. The goods in question were shipped on 30-9-1979. On 30-10-1979 Notification No. 208/79 was issued fixing the rate at Rs. 2.37 per Kg. and the said notification was to remain in force upto 31-12-1980. There is no evidence on record with reference to the entry of the goods in the territorial waters and to a specific query in this regard the learned counsel for the appellant was not able to give the precise date. The Customs authorities granted entry inwards to the Vessel on 10-11-1979 and the appellants filed the bill of entry for the goods on 16-11-1979.
5. The plea of the learned counsel that the principles of the doctrine of the promissory estoppel are applicable to the appellant in the context of the case notwithstanding the fact that the Notification No.208/79 dated 30-10-1979 specifying the rate of Rs. 2.37 per Kg. was actually in force when the bill of entry was placed is not tenable. We are not able to accede to the plea of the learned Counsel that the doctrine of promissory estoppel would bind the public authorities even when they exercise a statutory powe.r which is legislative in nature though delegated. The learned counsel was trying to draw a fine distinction between the exercise of legislative power by the legislature and by a subordinate delegated authority and drew support for such a plea from the ratio of ruling of the Supreme Court in the case of Godfrey Philips India Ltd. and Ors. reported in 1985 (22) ELT 306 (SC). On the other hand the Supreme Court in the said ruling has observed in para 13 as under : "Of course we must make it clear, and that is also laid down in Motilal Sugar Mills case (supra), that 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 is equally true that promissory estoppel" cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make." The learned counsel placed reliance on the ruling of the Supreme Court in 1979 Supreme Court cases page 409 M.P. Sugar Mills v. Union of India and Ors. In the present case the admitted fact remains that the earlier Notification No. 8/79 dated 5-1-1979 was amended by a subsequent Notification No. 208/79 enhancing not only the rate from Rs. 1.32 per Kg. to Rs. 2.37 per Kg. but also extending its operation upto 31-12-1980. This notification was issued under Section 25 of the Customs Act 1962 and is certainly statutory in nature and has all the force of law. The notification having come into force on 30-10-1979 would become operative on or from that date and in the instant case the appellant filed a bill of entry only on 16-11-1979. Therefore, in terms of Section 15(i) of the Govt. Act the rate of duty that would be applicable would be the rate prevailing on the date when the bill of entry was filed. This position is also made clear by the full Bench ruling of the Bombay High Court in the case of Apar Private Ltd. and Ors. v. Union of India and Ors. vide 1985 (22) ELT 644 (Bombay). The full Bench of the Bombay High Court in the said ruling has clearly held that the rate at which imported goods are chargeable to customs duty is to be determined under Section 15 of the Customs Act provided such goods were not wholly exempt from customs duty when they entered the territorial waters of India. Customs duty has to be charged on imported goods if they are being cleared immediately at the rate in force on the date of presentation of the bill of entry. The learned counsel for the appellants placed reliance on the ruling of the Bombay High Court in the case of Bharat Commerce & Industries Ltd. and Anr. v. Union of India and Ors. vide 1987 (32) ELT 40 (Bombay) and contended that the doctrine of promissory estoppel is applicable against Government when it was exercising powers conferred on it by statute of powers of subordinate legislation. The learned counsel also submitted that in the said ruling the notification with which we are concerned in the present case came up for consideration. In our opinion the ratio of the Bombay decision is not applicable in the context of the present case and particularly in view of ruling of the Supreme Court referred to supra.
We would also like to refer to the ruling of Special Bench of this Tribunal in the case of General Industries Society Ltd., Calcutta v.Collector of Customs, Calcutta vide 1986 (23) ELT 550 where the relevant questions with reference to the applicability of the principles of promissory estoppel have been dealt with in extenso. In view of our above findings, on the question with reference to the applicability of promissory estoppel and also in view of our finding with reference to the rate applicable in terms of the ruling of the Full Bench in the case of Apar Private Ltd. referred to supra, we do not think it is necessary to consider other citations given before us for the same questions.
6. Therefore, on careful consideration of the entire evidence on record, we hold that the impugned order fostering duty liability on the appellant in terms of Notification No. 208/79 referred to above is legal and proper and in this view of the matter we dismiss the appeal.