Tan India Ltd. Vs. U.O.i. - Court Judgment

Excerpt:
exemption - cement--mini cement plant--eligible under notfn. 194/79-ce up to 31.3.1984 only. minister's statement, if any, made in house can be treated as clarificatory; it cannot act as an estoppel. - - he would also rely on the averments in paragraph 9 of the affidavit wherein the petitioner has stated that since the press note did not specify as to from what date the concession for a period of 5 years would be made available, an un-starred question was raised in the lok sabha on 23-12-1981 to which the hon'ble minister for industry specifically stated on the floor of the house that the period of 5 years during which the concession in excise duty would be available is from the date of commencement of production and not from the date of the press note, namely 4-1-1979. 3. the petitioner states that acting upon the above statement made by the hon'ble minister on the floor of the house it has spent time and energy as well as huge amount of money in establishing a mini cement plant :but, unfortunately, the government had gone back upon their commitment contained in the press note and declined to grant relief of excise duty to the petitioner. the petitioner relies on the well-known theory of 'promissory estoppel' in support of its case. , dated 1-3-1983 as well as by notification no.order1. the prayer in the writ petition is for a mandamus to direct the respondent, namely, the union of india, to forbear from collecting excise duty in excess of 50% of the normal duty payable under tariff item no. 23 of the central excise and salt act, 1944 for a period of 5 years from the date of commencement of production of cement by the petitioner-company.2. mr. k. doraisami, learned senior counsel, appearing for the petitioner relies on a press note issued by the department of industrial development, ministry of industry, government of india dated 4-1-1979 in which the government stated that after studying the report of the two working groups set up by the government, the government had decided to encourage the mini cement plants and for that purpose 'the mini cement plants will be allowed a rebate in the payment of excise duty upto 50% for a period of five years' and contends that in keeping with the above press note, the petitioner-company a mini cement plant which commenced production in september, 1985 should have been allowed concession in the payment of excise duty upto 50% for a period of 5 years from the date of commencement of production. on the contrary, full excise duty was collected from the petitioner which according to the petitioner is illegal. he would also rely on the averments in paragraph 9 of the affidavit wherein the petitioner has stated that since the press note did not specify as to from what date the concession for a period of 5 years would be made available, an un-starred question was raised in the lok sabha on 23-12-1981 to which the hon'ble minister for industry specifically stated on the floor of the house that the period of 5 years during which the concession in excise duty would be available is from the date of commencement of production and not from the date of the press note, namely 4-1-1979.3. the petitioner states that acting upon the above statement made by the hon'ble minister on the floor of the house it has spent time and energy as well as huge amount of money in establishing a mini cement plant : but, unfortunately, the government had gone back upon their commitment contained in the press note and declined to grant relief of excise duty to the petitioner. the petitioner relies on the well-known theory of 'promissory estoppel' in support of its case.4. the press note dated 4-1-1979 does not indicate the date from which the concession in payment of excise duty would be granted. it is merely an indicated of the policy decision taken by the government. the liability for payment of excise duty is governed by the provisions of the central excise and salt act and the rules framed thereunder. cement is an excisable commodity. under item no. 23, the rate of excise duty is specified. the government is also enabled to grant exemption. therefore, in keeping with the press note, an exemption notification, namely, notification no. 194/79, dated 30-5-1979 was issued wherein it stated that the government exempts cement falling under item no. 23 of the first schedule to the central excises and salt act, 1944 and manufactured in a mini-cement plant from so much of the duty of excise as is in excess of rupees thirty-two and paise fifty per metric tonne. this notification specifically mentions that it shall be in force upto and inclusive of 31st march, 1984. subsequently, by notification no. 81/82. c.e., dated 28/2/1982 and by another notification no. 81/83. c.e., dated 1-3-1983 as well as by notification no. 60/83-c.e., dated 1-3-1983, the rate of excise duty payable by the mini cement plants was raised to rs. 100/- and rs. 170/- per metric tonne respectively. but, these notifications also took care to mention that the concession shall be in force upto and inclusive of 31st march 1984.5. the petitioner's factory admittedly commenced production only in september, 1985 by which time there was no exemption notification in force. in the absence of any such exemption notification, the petitioner cannot claim, as a matter of right, that it is entitled to pay excise duty only at concessional rate and not at the rates specified in item no. 23 of the first schedule.6. the petitioner's contention that because the hon'ble minister had stated on the floor of the house on 23-12-1981 that the concession would be available for a period of 5 years from the date of commencement of production, such concession would be made available from the date of commencement of production of cement by the petitioners-company cannot be accepted for more than one reason. the hon'ble minister made the statement, according to the petitioner, on 23-12-1981 when the aforesaid notifications were in force. therefore, the statutory power of grant of exemption had been exercised and the hon'ble minister clarified that from the date of commencement of production the concession would be available. secondly, a mere statement made by the hon'ble minister on the floor of the house does not automatically make law, much less a statutory law. any exemption under the central excises and salt act can be granted only by exercise of powers in accordance with the provisions of the act and, admittedly, while exercising that power, the exemption had been restricted only for the period uptill 31-3-1984. hence the petitioner is not entitled to plead the doctrine of 'promissory estoppel' against the specific provisions of a statute. hence, the writ petition is dismissed. no costs.

Judgment:
ORDER

1. The prayer in the writ petition is for a mandamus to direct the respondent, namely, the Union of India, to forbear from collecting excise duty in excess of 50% of the normal duty payable under Tariff Item No. 23 of the Central Excise and Salt Act, 1944 for a period of 5 years from the date of commencement of production of cement by the petitioner-company.

2. Mr. K. Doraisami, learned Senior Counsel, appearing for the petitioner relies on a Press Note issued by the Department of Industrial Development, Ministry of Industry, Government of India dated 4-1-1979 in which the Government stated that after studying the report of the two Working Groups set up by the Government, the Government had decided to encourage the mini cement plants and for that purpose 'the Mini Cement Plants will be allowed a rebate in the payment of excise duty upto 50% for a period of five years' and contends that in keeping with the above Press Note, the petitioner-company a Mini Cement Plant which commenced production in September, 1985 should have been allowed concession in the payment of excise duty upto 50% for a period of 5 years from the date of commencement of production. On the contrary, full excise duty was collected from the petitioner which according to the petitioner is illegal. He would also rely on the averments in paragraph 9 of the affidavit wherein the petitioner has stated that since the Press Note did not specify as to from what date the concession for a period of 5 years would be made available, an un-starred question was raised in the Lok Sabha on 23-12-1981 to which the Hon'ble Minister for Industry specifically stated on the floor of the House that the period of 5 years during which the concession in excise duty would be available is from the date of commencement of production and not from the date of the Press Note, namely 4-1-1979.

3. The petitioner states that acting upon the above statement made by the Hon'ble Minister on the floor of the House it has spent time and energy as well as huge amount of money in establishing a Mini Cement Plant : but, unfortunately, the Government had gone back upon their commitment contained in the Press Note and declined to grant relief of excise duty to the petitioner. The petitioner relies on the well-known theory of 'promissory estoppel' in support of its case.

4. The Press Note dated 4-1-1979 does not indicate the date from which the concession in payment of excise duty would be granted. It is merely an indicated of the policy decision taken by the Government. The liability for payment of excise duty is governed by the provisions of the Central Excise and Salt Act and the rules framed thereunder. Cement is an excisable commodity. Under Item No. 23, the rate of excise duty is specified. The Government is also enabled to grant exemption. Therefore, in keeping with the Press Note, an exemption notification, namely, Notification No. 194/79, dated 30-5-1979 was issued wherein it stated that the Government exempts cement falling under Item No. 23 of the First Schedule to the Central Excises and Salt Act, 1944 and manufactured in a mini-cement plant from so much of the duty of excise as is in excess of rupees thirty-two and paise fifty per metric tonne. This notification specifically mentions that it shall be in force upto and inclusive of 31st March, 1984. Subsequently, by Notification No. 81/82. C.E., dated 28/2/1982 and by another Notification No. 81/83. C.E., dated 1-3-1983 as well as by Notification No. 60/83-C.E., dated 1-3-1983, the rate of excise duty payable by the Mini Cement Plants was raised to Rs. 100/- and Rs. 170/- per metric tonne respectively. But, these notifications also took care to mention that the concession shall be in force upto and inclusive of 31st March 1984.

5. The petitioner's factory admittedly commenced production only in September, 1985 by which time there was no exemption notification in force. In the absence of any such exemption notification, the petitioner cannot claim, as a matter of right, that it is entitled to pay excise duty only at concessional rate and not at the rates specified in Item No. 23 of the First Schedule.

6. The petitioner's contention that because the Hon'ble Minister had stated on the floor of the House on 23-12-1981 that the concession would be available for a period of 5 years from the date of commencement of production, such concession would be made available from the date of commencement of production of cement by the petitioners-Company cannot be accepted for more than one reason. The Hon'ble Minister made the statement, according to the petitioner, on 23-12-1981 when the aforesaid notifications were in force. Therefore, the statutory power of grant of exemption had been exercised and the Hon'ble Minister clarified that from the date of commencement of production the concession would be available. Secondly, a mere statement made by the Hon'ble Minister on the floor of the House does not automatically make law, much less a statutory law. Any exemption under the Central Excises and Salt Act can be granted only by exercise of powers in accordance with the provisions of the Act and, admittedly, while exercising that power, the exemption had been restricted only for the period uptill 31-3-1984. Hence the petitioner is not entitled to plead the doctrine of 'promissory estoppel' against the specific provisions of a Statute. Hence, the writ petition is dismissed. No costs.