The principle of promissory estoppel applies to notifications issued by the Government under Section 25 of the Customs Act, 1962, which are not legislative in nature but rather executive or governmental functions.

JUDGMENT :

G.B. Patnaik, J. - The legality of the demand raised under An nexure 1/A by the Customs authority is the subject matter of challenge in this writ application, inter alia, on the ground that the notification issued by the Government of India on 28-11-1986 in exercise of its power under Sub-section (1) of Section 25 of the Customs Act superseding the earlier notification dated 1-8-1985 will have no application to the imported goods which had reached the Indian territory prior to the notification dated 28-11-1986 and were in the Bonded Warehouse, inasmuch as the goods were imported pursuant to the earlier notification dated 1-8-1985 and the Government is bound by the principle of Promissory Estoppel.

2. The petitioners' case in a nut-shell is that petitioner No. 1 is a Company engaged in the manufacture of cement and refractories products. Dead Burnt Magnesite (for short 'D.B.M.') is the raw material for manufacture of refractories and such D.B.M. having silica content less than 4% by weight is required for highly sophisticated refractories for use in specialised application areas of the steel plants. The said article is not manufactured in India and the Government of India had permitted import of the said material by the actual users under the Open General Licence Scheme. The Government of India published a notification in exercise of their powers under Sub-section (1) of Section 25 of the Customs Act, 1962 (hereinafter referred to as the "Act") exempting D.B.M. having silicon content less than 4% by weight from so much of that portion of the duty of customs leviable thereon as is in excess of the amount calculated at the rate of 40% ad valorem. The said notification dated 1st of August, 1985 was to remain in force upto and inclusive of 31st of July, 1986. The aforesaid notification has been annexed as Annexure-2/B to the writ application. By yet another Notification dated 30th July, 1986, issued by the Central Government Under Sub-section (1) of Section 25 of the Act, validity of the Notification under Annexure-2/B was extended till 30th of November, 1986, and the said notification has been annexed as Annexure-2/C to the writ application. The petitioners entered into agreements with overseas suppliers for importing the said D.B.M. and on 11-8-1986 placed orders for 4,500 metric tonnes of Brazilian D.B.M. and on 28-4-1986 for 6000 metric tonnes of Chinese D.B.M. The Brazilian D.B.M. reached Paradeep Port on 10-10-1986 and the Chinese D.B.M. reached Paradeep Port on 18-6-1986. The D.B.M. had been kept in the bonded warehouse at Paradeep and petitioners' case is that the duty payable on the goods had been paid and accepted by the authorities between 27th of November, 1986 and 30th of November, 1986. Before 30th November, 1986, 6,739.2340 metric tonnes of D.B.M. had been removed from the bonded warehouse and thereafter the petitioners were not permitted to remove the balance stock from the warehouse on the ground that the extra duty has to be paid in accordance with the Notification of the Government of India dated 28th of November, 1986, which has been annexed as Annexure-2/A. The two letters of the Superintendent of Customs & Central Excise in respect of the said quantity of D.B.M. lying in the bonded warehouse and not removed demanding extra amount have been annexed as Annexures-1/B and 1/C. In respect of the goods already removed between 28th of November and 30th of November, 1986, Opp. Party No. 1 also issued a demand for the differential duty, which has been annexed as Annexure-1/A. The petitioners' case is that they having entered into contracts with the foreign manufacturers acting on the representation of the Union Government in its Notifications under Annexures-2/B and 2/C and having imported D.B.M. on that basis, the Union Government is bound to levy duty in respect of those imported goods in accordance with the earlier notifications (Annexures-2/B and 2/C) and cannot enforce the notification under Annexure-2/A