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2011 DIGILAW 241 (GAU)

Dharampal Satyapal Limited v. Union of India

2011-03-18

AMITAVA ROY

body2011
JUDGMENT Amitava Roy, J. A review and/or a reconsideration of the judgment and order dated 10.12.2010 so far as it relates to WP(C) No. 749/2010 has been sought for by the instant application. 1. I have heard Mr. A.K. Bhattacharyya, Senior Advocate assisted by Mr. S.K. Medhi and Mr. P. Das, Advocates for the review applicant (also referred to as the applicant) and Mr. K.N. Choudhury, Addl. Advocate General, Assam assisted by Mr. R. Dubey, Advocate for the Revenue. 2. The applicant had approached this Court with a challenge to the notifications No. 11/2007-CE dated 01.03.2007 and No. 21/2007-CE dated 25.04.2007. Whereas, by the former the applicant was aggrieved by the withdrawal of the benefit of excise duty exemption vis-a-vis its tobacco products referred to therein, the latter visited it with similar adverse consequence qua its manufactured product, "Pan Masala". The separate impugnments against these two notifications before this Court were registered as WP(C) No. 750/2010 and WP(C) No. 749/2010 respectively. These petitions were heard analogously and were dismissed by the judgment and order referred hereinabove. 3. The factual premise, having regard to the nature of the proceeding in hand would essentially be in the bare minimum. The applicant's pleaded case in WP(C) No. 749/2010 was that being inspired by the North-Eastern Industrial Policy conveyed by the Finance memorandum No. EA/1/2/96-IPD dated 24.12.1997 (also hereinafter referred to as 1997 Policy) announcing new initiatives and incentives amongst others by way of central excise and Income tax exemption on various excisable commodities/goods including pan masala for a period of 10 years from the date of commencement of the commercial production thereof or the date of issuance of the notification, whichever was later, it set up its manufacturing units within the areas specified in the notifications No. 32/99-CE and 33/99-CE dated 08.07.1999 that followed being issued under the Central Excise Act, 1944 (hereinafter referred to as the Act) and other cognate legislations. It asserted that out of the 15 units so set up in the State of Assam, 8 were exclusively engaged in the manufacture of pan masala. It asserted that out of the 15 units so set up in the State of Assam, 8 were exclusively engaged in the manufacture of pan masala. While it, having been adjudged to be eligible under the aforementioned policy and the notifications, had been availing the benefit of exemption from payment of excise duty on its finished goods, the North East Industrial and Investment Promotion Policy, 2007 (for short referred to as the Policy, 2007) was promulgated vide Office Memorandum No. 10(3)/2007-DBA-II/NER dated 01.04.2007 by the Govt. of India in the Ministry of Commerce and Industry, Department of Industrial Policy and Promotion. This Policy though, approved a package of fiscal incentives and other concessions for the North Eastern Region with effect from that date categorized pan masala covered under Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985 (hereinafter for short referred to as the Tariff Act, 1985) in the "Negative List" of industries branded as ineligible for the benefits thereunder. The applicant, however insisted that this negative list, notwithstanding, it having commenced production on/or before 31.03.2007, it was entitled to enjoy the exemption benefits under the Policy, 2007 as well. It is in this premise that the impugned notification No. 21/2007-CE dated 25.04.2007 whereby the benefits extended by the notifications No. 32/99-CE and 33/99-CE dated 08.07.1999 was sought to be withdrawn vis-a-vis pan masala falling under Chapter 21 of the First Schedule to the Tariff Act, 1985 was assailed. 4. The applicant's challenge in WP(C) No. 750/2010 was similarly directed against the notification No. 11/2007-CE dated 01.03.2007, whereby, the benefit of the aforementioned exemptions under the notifications No. 32/99-CE and 33/99-CE dated 08.07.1999 was sought to be withdrawn vis-a-vis tobacco products as mentioned therein. 5. A spectrum of pleas composed of purposive interpretation of Policy, 2007, repugnancy of the impugned notifications to the policy, protection Under Section 38A of the Act, promissory estoppel, legitimate expectation etc. was projected to endorse the assailment. 6. The Respondent-Revenue, in essence, sought to repulse the charge by contending that the withdrawal of the exemptions was impelled by overwhelming public interest. It cited the subsistence of power in the Ministry concerned to modify the policy and justified incorporation of the negative list of ineligible industries in furtherance of such objective. was projected to endorse the assailment. 6. The Respondent-Revenue, in essence, sought to repulse the charge by contending that the withdrawal of the exemptions was impelled by overwhelming public interest. It cited the subsistence of power in the Ministry concerned to modify the policy and justified incorporation of the negative list of ineligible industries in furtherance of such objective. It also referred to Section154 of the Finance Act, 2003 read with Schedule IX thereto vis-a-vis the products enumerated therein to and also sought to reinforce its stand by relying on the decision of the Apex Court in R.C. Tobacco (P) Ltd. v. Union of India (2005) 7 SCC 725 . The Respondent-Revenue also relied upon a series of notifications to mark the progression of events between 08.07.1999 and 25.04.2007 to justify the impugned notifications. The pleas raised on behalf of the applicant were sought to be neutered on this counts. The contentions based on purposive interpretation of Policy, 2007 protection Under Section 38A of the Act, legitimate expectation and promissory estoppel were dismissed inter alia on the ground of absence of the impugnment of the aforementioned policy. 7. This Court sustained the stand of the Respondent-Revenue and dismissed the challenge laid by the applicant on the following grounds: (a) Section 154 of the Finance Act, 2003 read with Schedule IX thereof recalled the benefit of excise duty exemption under the Policy, 1997 with retrospective effect vis-a-vis pan masala and tobacco products. (b) Assailment of the vires of Section 154 of the Act had been negatived by the Apex Court in R.C. Tobacco (P) Ltd. v. Union of India (Supra). (c) The partial respite from the denial of exemption by notification No. 69/2003 dated 25.08.2003 and 11/2007-CE dated 09.07.2009 was independent of the Policy, 1997. (d) Having regard to the background of the Policy, 2007 and the progression of events including incorporation of Section 154 of the Finance Act,2003 read with Schedule IX thereto, the goods under Chapter 24 and pan masala under Chapter 21 of the First Schedule to the Tariff Act, 1985 cannot be construed to be eligible to avail the benefit/incentives only because the units concerned had commenced commercial production on or before 31.03.2007. (e) The interpretation of Policy,2007 as accorded by the applicant if accepted would not only render the negative list therein redundant and otiose, it would efface the march of events prior thereto ending with Section 154 of the Finance Act, 2003, the vires whereof has been upheld by the Apex Court in R.C. Tobacco(Supra). (f) the Policy,2007 not having been challenged, the intention different from the one under Policy,1997 vis-a-vis the industries under the negative list being apparent, the applicant was not entitled to any benefit Under Section 38A of the Act as well as the doctrines of promissory estoppel and legitimate expectation. 8. The review applicant presently seeks to contend in substance that as Section 154 of the Finance Act,2003 read with Schedule IX thereof was not applicable to pan masala not containing tobacco, its manufactured product involved in WP(C) No. 749/2010, the ultimate conclusion recorded against it in that writ proceeding suffers from the vice of "doctrine of mistake of fact" and "doctrine of mistake of law" and the same being apparent on the face of the record, the impugned judgment and order to that extent is reviewable. Referring to the plenary power of this Court to correct its patent errors in adjudication in the interest of justice, Mr. Bhattacharjee highlighted that Section 154 of the Finance Act, 2003 read with Schedule IX thereto as well as the decision of the Apex Court in R.C. Tobacco (Supra) had been wrongly applied to the facts of WP(C) No. 749/2010. 9. The Senior counsel for the applicant while reiterating the above in his usual fairness admitted the omission on the part of the review applicant to point out to this Court in particular that its product pan masala and involved in WP(C) No. 149/2010 did not contain tobacco either in its pleadings or in course of the arguments. Mr. Bhattacharyya did not urge any other ground in pursuit of the relief for review. 10. Mr. Choudhury, did not dispute the plea of non applicability of Section 154 of the Finance Act, 2003, Schedule IX thereto and the rendering of the Apex Court in R.C. Tobacco (Supra) to the issues relatable to the Petitioner's manufactured product of pan masala not containing tobacco. 10. Mr. Choudhury, did not dispute the plea of non applicability of Section 154 of the Finance Act, 2003, Schedule IX thereto and the rendering of the Apex Court in R.C. Tobacco (Supra) to the issues relatable to the Petitioner's manufactured product of pan masala not containing tobacco. He however insisted that this notwithstanding having regard to the framework of Policy, 2007 and the import thereof as a whole, pan masala under Chapter 21 of the Tariff Act, 1985 having been clearly incorporated in the negative list thereunder, the challenge to the notification dated 25.04.2007 even otherwise ought to fail and therefore no review and/or reconsideration of the judgment and order as sought for is warranted. The learned Addl. Advocate General to consolidate this contention heavily relied on Clause - 3 of the Policy, 2007 emphasizing as well on the plentitude of power of the Government as the framer of the Policy to re-model the same in the felt exigencies catering to public interest. 11. The rival submissions have been duly noticed. A plain reading of the averments in the writ petition of WP(C) No. 749/2010 reveals that though, these successively referred to pan masala as the manufactured product of the applicant involved therein, as submitted by Mr. Bhattacharyya it is not decipherable therefrom that it was sans tobacco. This assumes significance in the context of the ground now taken for review in as much as pan masala containing tobacco falling under sub-heading No. 2402.00 or 2404.49 as the case may be of the First Schedule or the Second Schedule to the Tariff Act, 1985 had been excluded from the purview of exemption in Schedule IX of the Financial Act, 2003. Be that as it may as admittedly the applicant's pan masala in WP(C) No. 149/2010 is without tobacco, it evidently is beyond the coils of Section 154 of the Finance Act,2003, Schedule IX thereto as well as the determination in R.C. Tobacco(Supra). To this extent, the above legal provision, as well as the aforementioned decision of the Apex Court have no bearing on the adjudication vis-a-vis this product of the applicant. Reference thereto in the process of adjudication in this writ proceeding, therefore, is obviously erroneous. 12. The above elucidation thus consequentially confines the debate to the interpretation of Policy, 2007 in the background Policy, 1997 vis-a-vis pan masala not containing tobacco. Reference thereto in the process of adjudication in this writ proceeding, therefore, is obviously erroneous. 12. The above elucidation thus consequentially confines the debate to the interpretation of Policy, 2007 in the background Policy, 1997 vis-a-vis pan masala not containing tobacco. As detailed in paragraph 68 and 69 of the judgment and order sought to be reviewed, the salient features of Policy, 2007 have been duly elaborated therein and need no repetition here. Pan masala is covered under Chapter 21 of the First Schedule to the Tariff Act, 1985 and admittedly is one of the ineligible industries catalogued in the negative list thereof. This Policy is not under challenge by the applicant. Though, reference of Section 154 of the Finance Act, 2003 read with Schedule IX relatable amongst others to pan masala containing tobacco falling under sub-heading 2402.00 or 2404.49 as the case may be of the First Schedule or Second Schedule to the Tariff Act,1985 is evidently uncalled for, a very remote yet perceptible bearing thereof on the process of classification of pan masala as a whole under Chapter 21 of this enactment in the negative list is deductible. In the opinion of this Court even if the impact of Section 154 of the Finance Act,2003 read with Schedule IX thereto and the decision of the Apex Court in R.C. Tobacco (Supra) wears off in view of the non applicability thereof to pan masala not containing tobacco, having regard to the otherwise irrefutable and unequivocal exclusion of this product from the purview of exemption/incentives extended under the Policy,2007, the impugnment of the notification dated 25.04.2007 which is an instrument to actualise this intention of the policy maker cannot be upheld. The finding in the judgment and order under review that the interpretation of Clause (2) of Policy, 2007 as provided by the applicant if accepted would render the negative list infructuous for all intents and purposes is reiterated. 13. The validity of 2007 not having been challenged by the applicant, the impugned notification dated 25.04.2007 being in accord therewith has to be upheld. A clear intention different from the one lodged in 1997 policy being visible in Policy, 2007 the applicant's plea based on Section 38Aalso cannot be sustained. The applicant's contention based on promissory estoppel and legitimate expectation also has to fail for want of challenge to the Policy, 2007 on which its case is founded. A clear intention different from the one lodged in 1997 policy being visible in Policy, 2007 the applicant's plea based on Section 38Aalso cannot be sustained. The applicant's contention based on promissory estoppel and legitimate expectation also has to fail for want of challenge to the Policy, 2007 on which its case is founded. As 2007 Policy in the opinion of this Court does not ensure the benefit of exemption/incentives to pan masala not having tobacco, these two doctrines are of no avail to it. 14. On a totality of the considerations, the observations and findings of this Court as recorded in the judgment and order dated 10.12.2010 based on Section 154 of the Finance Act, 2003, Schedule IX thereof and the determination in R.C. Tobacco (Supra) so far as those relate to the applicant's product pan masala without tobacco are hereby recalled. The adjudication on other counts is sustained. The conclusions recorded herein read in conjunction with those in the judgment and order under review to the exclusions as alluded hereinabove warrant the rejection of WP(C) No. 749/2010. Ordered accordingly. The review petition in the ultimate analysis is rejected. No costs.