REXIN SEA INDIA Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner carries on business of manufacture of P.V.C. coated fabrics. THE petitioner, finding that the raw material PVC (Polyvinyl Chloride Resin) is not available in sufficient quantities in India, wanted to import the same from foreign countries. P.V.C. Resin is classified under Customs Tariff Act, 1975 under Item 39.01/06 and the duty is payable 100%ad valorem.

(2.) HOWEVER, in exercise of the powers conferred by Section 25 of the CustomsAct, the Central Government issued Notification No. 66-Cus., 15-3-1979, under which they ordered that PVC Resin when imported into India, would be exempt from the whole of the customs duty leviable thereon. This notification specifically stated that the same shall be in force upto and inclusive of 31st March, 1981. The petitioner states that acting upon the assurance and promise so held out by the aforesaid Notification dated 15-3-1979, he placed orders with foreign suppliers for import of certain quantities of PVC Resin. The contract between the petitioner and the foreign suppliers specifically provided that the consignment is to be delivered before 31-3-1981. The petitioner opened irrevocable letters of credit in favour of the suppliers. One of the consignments so ordered was expected to arrive at the Madras Port on 5th January, 1981. Before the petitioner could clear the consignment by availing the benefit of Notification 66-Cus., dated 15-3-1979; it came to know that by a subsequent notification bearing No. 205-Cus., dated 16-10-1980, the earlier Notification 66-Cus., dated 15-3-1979 was superseded and customs duty at 40%ad valoremwas imposed.

(3.) MR. R. Krishnamoorthy, learned senior counsel appearing for the petitioner in both the writ petitions submit that the respondents are bound by the principle of promissory estoppel and they are bound to give the benefit of Notification 66 dated 15-3-1979 to the PVC Resins imported by the petitioner before 31-3-1981 and the respondents should be restrained from invoking to their aid Notification No. 205 dated 16-10-1980. The case of the petitioner is that the trade was given a promise that the Notification No. 66-Cus., dated 15-3-1979 would be in force upto and inclusive of 31st March, 1981. It is under that Notification, the Central Government in public interest exempted polyvinyl chloride Resin when imported into India from the whole of duty of customs leviable thereon. Based on this representation contained in the Notification dated 15-3-1979, the petitioner had placed orders with foreign suppliers for import of PVC Resins. It is not in dispute that such firm orders were made much before 31-3-1981. It is also not in dispute that the letters of credit were opened before 31-3-1981. The consignment in question had also arrived at the Madras Port much before 31st March, 1981. Therefore, if Notification No.66-Cus., dated 15-3-1979 had been applied to the imports made by the petitioner and covered by those writ petitions, then the petitioner would not have had to pay any customs duty. The petitioner's case is that it was given a representation by the Central Government that if it would import polyvinyl chloride Resin on or before 31st March, 1981, then it would not have had to pay duty of customs leviable thereon. It states that but for such representation, it would not have ventured into this task of importing PVC Resins from foreign countries. It is also its case that if customs duty at 40% etc., is levied and collected from it, then it would not be in a position to stand the competition in the trade as its cost of production would increase enormously. Being lulled into such a belief that it would be entitled to clear the consignment if imported before 31st March, 1981 without payment of customs duty, it was shocked and surprised when the respondents invoked the aid of Customs Notification 205, dated 16-10-1980 and refused to allow clearance without payment of customs duty. The petitioner thus invokes the well known doctrine of promissory estoppel.5 MR. P. Narasimhan, Senior Central Government Standing Counsel would oppose these contentions. He would submit that there cannot be an estoppel against the statute. It is his case that a Notification issued by exercise of powers under Section 25 of the Customs Act is neither an administrative action, nor the making of subordinate legislation, but it will amount to legislation itself, because any Notification made under Section 25 has to be tabled before the Houses of the Parliament and comes into force only on approval. Secondly, he would submit that in any event, when the Government of India had taken a policy decision that effective from 16-1-1980, the import of PVC Resins would attract customs duty at 40%ad valorem, etc., the petitioner cannot question the policy of the government.