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Andhra Pradesh High Court
Judges : B.P.JEEVAN REDDY
Feno Plast Pvt.Ltd. - Appellant
Versus
Union of India - Respondent
Decided On : 06-30-81
CUSTOMS ACT, 1962 - SECTION 25 - EXEMPTION NOTIFICATION - PUBLIC INTEREST - PROMISSORY ESTOPPEL - APPLICABILITY - GOVERNMENT'S POWER TO MODIFY OR RESCIND EXEMPTION NOTIFICATION - EXERCISE OF STATUTORY POWER - NO ESTOPPEL AGAINST STATUTE.
Fact of the Case:
The petitioners, manufacturers using polyvinyl chloride resins, challenged the validity of a notification modifying an earlier notification issued under Section 25 of the Customs Act, 1962, which had exempted the import of polyvinyl chloride resins from customs duty till 31st March, 1981. The petitioners argued that they had placed orders for import and made arrangements for removing the goods from the warehouse based on the exemption notification and that the modification of the notification before the goods were imported and removed from the warehouse amounted to promissory estoppel.
Finding of the Court:
The court held that the exemption notification did not constitute a representation or promise made by the Central Government intended to be acted upon by the petitioners and that the rule of estoppel could not be founded upon such promise or representation. The court further held that the power of exemption granted to the Government under Section 25 of the Customs Act was a statutory power to be exercised in accordance with the demands of public interest and that the Government could modify or rescind such notifications as and when the public interest so demanded.
Issues: 1. Whether the exemption notification issued under Section 25 of the Customs Act, 1962, constituted a representation or promise made by the Central Government intended to be acted upon by the petitioners. 2. Whether the rule of promissory estoppel could be founded upon such promise or representation. 3. Whether the Government could be estopped from modifying or rescinding the exemption notification in the exercise of its statutory power under Section 25 of the Customs Act.
Ratio Decidendi: 1. The exemption notification was issued in public interest and was not intended to induce the petitioners to import P. V. resins. 2. The Government cannot be bound by any promise not to do a particular thing which it is obliged, under law, to do. 3. The power of exemption granted to the Government under Section 25 of the Customs Act is a statutory power to be exercised in accordance with the demands of public interest and the Government can modify or rescind such notifications as and when the public interest so demands.
Final Decision: The writ petitions were dismissed.
( 1 ) SECTION 25 of the Customs Act, 1962 empowers the Central Government, if it is satisfied that it is necessary in the public interest so to do, to exempt generally either absolutely or subject to such conditions as may be specified in the notification, goods of any specified description from the whole or any part of the duty of customs leviable thereon under the Act. In exercise of this power, the Central Government issued notification No. 66/79 dated 15/03/1979 which is to the following effect :- "in exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, No. 145-Customs, dated the 27/07/1978, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts polyvinyl chloride resins, falling within Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from the whole of the duty of customs leviable thereon which is specified in the said First Schedule. This notification shall be in force upto and inclusive of the 31/08/1979. " By a subsequent notification the date " 31/08/1979" was substituted by the words " 31/03/1980" and by another notification No. 37/80 dated 25/03/1980 the words " 31/03/1981" were substituted for the words " 31/03/1980. However on 16/10/1980 the Central Government issued another notification bearing No. 205/f. No. 355/141/80 Customs 1, impugned herein, modifying the earlier notification. It reads : "in exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 66-Customs, dated the 15/03/1979, the Central Government being satisfied that it is necessary in the public interest so to do hereby exempts polyvinyl chloride resins, falling within Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of forty per cent ad valorem".
( 2 ) THE petitioners herein are manufacturers of certain products involving the use and consumption of polyvinyl chloride resins. Polyvinyl chloride resin, according to the petitioners, has to be mainly imported from abroad. Though according to Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), the customs duty leviable is 100% of the value, the Central Government under notification No. 66/79 dated 15/03/1979, referred to above, exempted these goods from the customs duty altogether. The petitioners say that in view of the said notification they placed orders abroad for import of the said product and that it was actually imported into India and sought to be removed from the concerned warehouse well before 31/03/1981. (The customs duty, as held by the Supreme Court, on imported goods is levied and becomes payable when the goods are sought to be removed from the warehouse. However, by the date the petitioners sought to remove the goods from the warehouse, the impugned notification dated 16/10/1980 had come into force and accordingly the customs authorities demanded customs duty to the extent of 40% of the value of the goods as a pre-condition for premitting the goods to be removed from the warehouse. The petitioners then approached this Court. Their case is that they had placed the order for the import of the PVC Resin only in view of and acting upon the exemption notification aforesaid which clearly stated that it is operative till 31/03/1981. They made arrangements for importing the goods and for removing them from the warehouse well before that date. But the impugned notification was issued after they placed orders for the import and furnished Bank g
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