Page 121 - ELT_15th May 2020_VOL 372_Part 4th

2020 ] UNION OF INDIA v. V.V.F. LTD. 511

9.2.1 Notification No. 16/2008, dated 27-3-2008, amended Notification
No. 39/2001-C.E. by providing that the benefit of refund would be granted with
reference to the value addition undertaken by manufacturing units in Kutch dis-
trict. Value addition of 34% was notionally fixed by Notification 16/2008-C.E. for
the commodities manufactured by the respondents. The said notification also
provided for determination of special rate by the Commissioner of Central Excise
in a situation where the actual value addition was more than the deemed value
addition of 34%. As a consequence of the said amendment the incentive was re-
duced from refund of the entire of the duty paid in cash/PLA to 34% of the total
duty paid, in so far as the respondents are concerned. Thus the respondents suf-
fered a loss to the extent of 66% of the duty paid, which it was hitherto entitled to
as refund;
9.2.2 From 3-9-2008 the notional value addition of the products manu-
factured by the respondent was capped at 75%. The respondents hence suffered
detriment to the extent of 25% of the duty paid, which it could not seek as re-
fund;
9.2.3 The amendment made to Notification 39/2001 by the Notification
No. 16/2008 and amendments thereto had the effect of reneging upon the prom-
ise made by the Central Government to grant incentive by way of refund of the
duty paid in cash/PLA for a period of five years starting from the date of com-
mencement of commercial production. It is settled law laid down by this Court
that the Government is bound to implement its promise, if a person has irrevo-
cably altered his position acting on an unequivocal promise held out by the Gov-
ernment, save and except in a situation where the withdrawal of the incentive is
justified on grounds of supervening public interest.
9.2.4 On the applicability of Principle of Promissory Estoppel, the re-
spondents rely upon the decisions of this Court in the cases of Union of India v.
Godfrey Philips India Ltd., (1985) 4 SCC 369 = 1985 (22) E.L.T. 306 (S.C.), Pournami
Oil Mills v. State of Kerala, 1986 (Supp) SCC 728 = 1987 (27) E.L.T. 594 (S.C.), Shri
Bakul Oil Industries v. State of Gujarat, (1987) 1 SCC 31 = 1987 (27) E.L.T. 572 (S.C.),
Pawan Alloys & Casting Pvt. Ltd. v. U.P. Electricity Board, (1997) 7 SCC 251, Dai Ichi
Karkaria Ltd. v. Union of India, (2000) 4 SCC 57 = 2000 (119) E.L.T. 516 (S.C.),
Mahabir Vegetable Oils (P) Ltd. v. State of Haryana, (2006) 3 SCC 620, State of Punjab
v. Nestle India, (2004) 6 SCC 465, MRF Ltd. Kottayam v. Assistant Commissioner of
Sales Tax, (2006) 8 SCC 702 = 2006 (206) E.L.T. 6 (S.C.), Southern Petrochemical In-
dustries Co. Ltd. v. ETIO, (2007) 5 SCC 447;
9.2.5 It is submitted therefore that the High Court has correctly applied
the settled Doctrine of Promissory Estoppel by examining whether the facts and
the circumstances leading to the curtailment of incentive were indeed in public
interest or not so as to justify a midway withdrawal of the incentive;
9.3 That in fact the incentive promised under the original Notification
No. 39/2001 was not dependent upon the extent of value addition. It is submit-
ted that this concept was introduced only by the impugned Notification No. 16 of
2008;
9.4 Exemption was granted by way of refund to the duty paid in
cash/PLA. The payment from PLA is not necessarily duty on value addition. The
proposition that the payment from PLA represents such value addition may hold
good only if the inputs used in the manufacture of final products are duty paid
and the rates of duty on inputs and final products are the same;
EXCISE LAW TIMES  15th May 2020  121