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SUPREME COURT OF INDIA
ARUN MISHRA, M. R. SHAH, B.R. GAVAI, JJ.
UNION OF INDIA AND ORS. – APPELLANT(S)
VERSUS
M/S UNICORN INDUSTRIES – RESPONDENT(S)
CIVIL APPEAL No. 7432 OF 2019 (Arising out of S.L.P.(C) No. 36926 of 2012) WITH CIVIL APPEAL No. 2345 OF 2017 and CIVIL APPEAL No. 2346 OF 2017
Decided on : 19-09-2019
(A) Central Excise Act, 1944 – Section 5A(1) – Additional Duties of Excise (Goods of Special Importance) Act, 1957 – Section 3(3) – Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 – Section 3(3) – Excise duty – Withdrawal of exemption in public interest – An exemption notification does not make items which are subject to levy of customs duty as items not leviable to such duty – It only suspends levy and collection of customs duty subject to such conditions as may be laid down in public interest – Such exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions – Supersession or revocation of an exemption notification in public interest is an exercise of statutory power by State under law itself – Under General Clauses Act an authority which has power to issue a notification has undoubted power to rescind or modify notification in a like manner – Exemption in public interest is a matter of policy and courts would not bind Government to its policy decisions for all times to come, irrespective of satisfaction of Government that a change in policy was necessary in public interest. (Paras 15 and 17)
(B) Central Excise Act, 1944 – Section 5A(1) – Additional Duties of Excise (Goods of Special Importance) Act, 1957 – Section 3(3) – Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 – Section 3(3) – Excise duty – Withdrawal of exemption in public interest – Consumption of pan masala with tobacco as well as pan masala sans tobacco is hazardous to health – Gutkha and pan masala have been one of major causes of oral cancer – Gutkha and pan masala have flooded Indian markets and become popular amongst all age groups – Taking into consideration this aspect, if State has decided to withdraw exemption granted for manufacture of such products, it cannot be said to be not in public interest – When withdrawal of exemption is in public interest, public interest must override any consideration of private loss or gain – Once public interest is accepted as a superior equity which can override an individual equity, same principle should be applicable in such cases where period is prescribed – Withdrawal of exemption to pan masala with tobacco and pan masala sans tobacco is in larger public interest – As such, doctrine of promissory estoppel could not have been invoked in present matter – State could not be compelled to continue exemption, though it was satisfied that it was not in public interest to do so – Judgment and order passed by High Court of Sikkim quashed and set aside. (Paras 19, 21, 25, 29, 31, 36 and 37)
(C) Doctrine – Promissory Estoppel – Applicability – Doctrine of promissory estoppel cannot be invoked in abstract – Courts are bound to see all aspects including objective to be achieved and public good at large – While considering applicability of doctrine, courts have to do equity – Fundamental principle of equity must forever be present in mind of Court while considering applicability of doctrine – Doctrine of promissory estoppel must yield when equity so demands and when it can be shown having regard to facts and circumstances of case, that it would be inequitable to hold Government or public authority to its promise, assurance or representation – Once public interest is accepted as a superior equity which can override an individual equity, same principle should be applicable in such cases where period is prescribed. (Paras 14 and 23)
Facts of Case:
Question of law that arises for consideration in these appeals is, ‘as to whether, by invoking doctrine of promissory estoppel, can the Union of India be estopped from withdrawing the exemption from payment of Excise Duty in respect of certain products, which exemption is granted by an earlier notification; when Union of India finds that such a withdrawal is necessary in public interest.
Findings of Court:
Appellate Bench does not find it necessary to even make a reference to judgment of this Court which was relied on by Single Judge while dismissing the writ petitions and which is specifically put in service by the Union of India. We are unable to appreciate as to how Appellate Bench of the Gauhati High Court finds that withdrawal of exemption in respect of ‘pan masala with tobacco’ is not in the public interest.
Result : Appeals allowed.
JUDGMENT
B.R. Gavai, J.
Leave granted in S.L.P.(C) No. 36926 of 2012.
2. The question of law that arises for consideration in these appeals is, 'as to whether, by invoking the doctrine of promissory estoppel, can the Union of India be estopped from withdrawing the exemption from payment of Excise Duty in respect of certain products, which exemption is granted by an earlier notification; when the Union of India finds that such a withdrawal is necessary in the public interest.
3. Since the factual position as well as the question of law arising in the present three appeals are common, they are heard together and disposed of by this common judgment. The appellant, Union of India, in exercise of powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1994) (hereinafter referred to as the "Central Excise Act") read with sub-section (3) of Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) and sub-section (3) of Section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), being satisfied that it is necessary in the public interest, by Notification No. 71 of 2003 dated 09.09.2003, exempted the goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) other than the goods specified in Annexure-I to the said Notification, from the payment of duties under the said statutes. The notification provided that so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said Acts as was equivalent to the amount of duty paid by the manufacturer of the said goods, other than the amount of duty paid by utilisation of CENVAT credit under the CENVAT Credit Rules, 2002, was exempted. This exemption was available to the units located in Industrial Growth Centre or Industrial Infrastructure Development Centre or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area, as the case may be, in the State of Sikkim, as specified in Annexure-II appended to the said notification. A procedure was also prescribed under the said notification for availing the benefit of exemption. Annexure-I thereto provides the list of the products which were not entitled for exemption. Clause 1 of the said Annexure reads thus:
'1. Tobacco and Tobacco products including Cigarettes/ Cigars/ Gutkha"
Similar notifications were issued by the Union of India being Notification Nos. 32 of 1999-CE and 33 of 1999-CE dated 08.07.1999 insofar as the State of Assam is concerned.
4. By Notification No. 21 of 2007-CE dated 25.04.2007, the earlier notifications issued by it were amended. The effect of the amendment was that the product 'pan masala' falling under Chapter 21 of the First Schedule of the Central Excise Tariff Act, 1985, the goods falling under Chapter 24 of said First Schedule, i.e., tobacco and manufactured tobacco substitutes and plastic carry bags of less than 20 microns were included in the negative list and as such were no longer entitled for exemption from the excise duty. Being aggrieved by the said notification, the respondent, namely, Unicorn Industries in the Civil Appeal arising out of Special Leave Petition (C) No. 36926 of 2012, approached the High Court of Sikkim by way of Writ Petition (C) No. 22 of 2007. The High Court of Sikkim vide its judgment and order dated 11.05.2012 allowed the writ petition and held that the petitioner therein was entitled to exemption from payment of excise duty on the manufacture of pan masala from its unit situated in the State of Sikkim for a period of 10 years from the date of commencement of the commercial production, i.e., 27.06.2006.
5. Similarly, the respondent in Civil Appeal No. 2346 of 2017, namely, M/s Dharampal Satyapal Ltd., which was a manufacturer of pan masala with tobacco and other tobacco products, approached the Gauhati High Court by way of a petitio
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