M.R.SHAH,J. - (1.) Leave granted in all the special leave petitions. Civil Appeals @ SLP (C) Nos. 28194-28201 of 2010
(2.) As common question of law and facts arise in this group of appeals and as such arise out of the impugned common judgment and order dated 10.03.2010 passed by the High Court of Gujarat at Ahmedabad in respective Special Civil Application Nos. 5909/2008, 6300/2008, 6298/2008, 6299/2008, 5907/2008, 8468/2008, 6334/2008 and 6562/2008, all these appeals are being decided and disposed of by this common judgment and order. 2.1 Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 10.03.2010 passed by the High Court of Gujarat at Ahmedabad in respective Special Civil Application Nos. 5909/2008, 6300/2008, 6298/2008, 6299/2008, 5907/2008, 8468/2008, 6334/2008 and 6562/2008, by which the Division Bench of the High Court has allowed the aforesaid writ petitions preferred by the respondents herein - original writ petitioners and by which the High Court has held that the impugned policy of withdrawal of the benefit/incentive to the original writ petitioners is retrospective and not retroactive and quashed and set aside the Notification 16/2008 dated 27.03.2008, on the ground that bar of promissory estoppel would operate, the Union of India has preferred the present appeals.
(3.) The facts leading to the present appeals and the List of Dates and Events in nutshell are as under: Kutch District in the State of Gujarat was struck by a devastating earthquake on 26.01.2001 which destroyed the existing infrastructure in that District, besides causing huge casualties. With a view to attract large scale investment and to generate new employment opportunities in the District of Kutch, the Government of India announced an Incentive Scheme for setting up New Industries in the earthquake affected District of Kutch, by issuing Central Excise Exemption Notification No. 39/2001-CE dated 31.07.2001. The said notification granted exemption to goods cleared from a New Industrial Unit set up in the Kutch District of Gujarat prior to 31.07.2003 (which was subsequently extended to 31.12.2005) from so much of duty of excise as was equivalent to the amount of duty paid in cash/Personal Ledger Account (PLA) on the finished goods. That the said incentive of refund of the duty paid in cash/PLA was available for the period of 5 years from the date of commencement of commercial production. The object of the Incentive Scheme was to revive the economy in Kutch District by attracting fresh large scale investments from entrepreneurs by setting up new industries in the said District so as to generate new employment which in turn would help Kutch District and its people to be brought back in the main stream with the Nation. The said notification operationalised the incentive scheme in the following manner: (a) The eligible unit was required to produce a certificate from a High Powered Committee comprising of a Chief Commissioner of Central Excise and the Chief Secretary to the Government of Gujarat certifying that the unit was indeed a new industrial unit which had been set up on or after the date of the Exemption Notification but not later than 31.07.2003 (this cut-off date was subsequently extended to 31.12.2005); (b) The unit was to furnish a declaration regarding the value of investment in plant and machinery installed in the factory as on the date of commercial production and also obtain a certificate to this effect from the Committee confirming the original value of the investment; (c) The procedure for claiming refund, envisaged submission of a statement of the total duty payments including duty paid by utilization of Cenvat Credit) to the jurisdictional Central Excise Authority and verification of the above in a time bound manner by such authority; (d) The notification also provided for recovery of any excess refund claimed/granted together with interest in case the value of plant and machinery was wrongly declared, as also in some other eventualities which were added by various amending notifications; (e) Where fresh investment in the plant and machinery was below Rs. 20 crores - the incentive available was for the first clearances up to an aggregate value not exceeding twice the value of such investment from the date of commencement of commercial production, in each year; and (f) Where the investments were more than Rs.20 crores - the Incentive would be unlimited as there was no upper cap. 3.1 The original writ petitioners set up new industrial units in the Kutch District. They made an investment in the plant and machinery of more than Rs.20 crores. According to them, almost the entire duty was required to be paid in cash, the whole of which was refundable without any upper cap in terms of the notification No. 39/2001-CE dated 31.07.2001. 3.2 It appears that the then Government of Gujarat announced an Incentive Scheme, 2001 dated 09.11.2001 for the economic development of Kutch District. Under the said notification, Sales Tax exemption was provided. The Sales Tax exemption was available only to those industries which were eligible for excise exemption under Notification No. 39/2001-CE dated 31.07.2001. 3.3 Various amendments were made to the original Incentive Scheme Notification No. 39/2001-CE dated 31.07.2001 between September, 2001 to September, 2004, inter alia, to clarify certain matters and also to extend the cut-off date for setting up new industrial units from 31.07.2003 to 31.12.2005. One another amendment was made with effect from 06.08.2003 vide notification No. 65/2003-CE to provide that PLA payments could be made to discharge duty liabilities on the finished products only after exhausting the CENVAT Credit balances. 3.4 According to the original writ petitioners, in view of the inventive offered under Notification No. 39/2001-CE, the respondents herein - original writ petitioners which had initially planned to expand their manufacturing activities at Maharashtra, decided to instead set up the new units in the Kutch District. That was in the month of December, 2005. According to the original writ petitioners, the said decision was taken only because of the "incentive" promised by the Government to refund excise duty paid in the Kutch area. According to the original writ petitioners, as a result of the decision to set up a new unit in Kutch District, the company had to additionally incur substantial costs towards additional freight, handling charges, storage charges etc., which worked out to approximately Rs. 2,200/- PMT. In addition, the company suffered severe locational disadvantages. 3.5 Original writ petitioners commenced commercial production of split/crude fatty acid, etc. somewhere between the months of November, 2004 to December, 2005. The primary raw materials for manufacture of these final products was palm kernel oil, crude palm kernel oil, other vegetable oils. 3.6 The said Incentive Notification No. 39/2001-CE was amended by another notification No. 16/2008-CE dated 27.03.2008 (impugned before the High Court), which according to the writ petitioners was relating to a virtual withdrawal of the incentive scheme. The amended notification provided that the benefit of refund would be granted with reference to the value addition, which was notionally fixed @ 34% for the commodity manufactured. Notification No. 16/2008-CE also provided for determination of a special rate by the Commissioner, in a situation where the actual value addition was more than the deemed value addition as specified. According to the original writ petitioners, as a consequence of the said amendment, the inventive available to them stood reduced from the refund of the entire of the duty paid in cash/PLA to 34% of the total duty paid. The original writ petitioners challenged the subsequent notification No. 16/2008-CE before the High Court of Gujarat by way of the aforesaid writ petitions. It was the case of the original writ petitioners that the subsequent notification No. 16/2008-CE changed the entire basis of the incentive exemption and had the effect of substantially reducing their entitlement of refund. It was also the case on behalf of the original writ petitioners that as a result of the said amendment which resulted in their entitlement for refund being reduced from nearly 100% of the duty paid to only 34% of such duty amount. According to the original writ petitioners, since the promised incentive was curtailed midway before the expiry of the five years period, the subsequent notification was in breach of the principle of promissory estoppel. 3.7 The aforesaid writ petitions were opposed by the revenue by submitting as under: (i) the Exemption Notification prompted certain unscrupulous manufacturers to indulge in different type of tax evasion tactics; (ii) the intention behind the Exemption Notification was to incentivise genuine manufacturers only to the extent of actual value addition made by them; (iii) duty paid in cash by units set up in District of Kutch pursuant to the Exemption Notification was found to be inordinately high as compared to other similarly placed units in other parts of India; (iv) the Central Government by the very same power by which it grants exemption is empowered to withdraw the same; (v) the impugned notifications are only a modification to give effect to the real intention of the Government and are not withdrawal of the benefit; and (vi) in light of the misuse of the exemption pleaded by UOI, public interest warrants such withdrawal. 3.8 Simultaneously, the manufacturing units also filed representations to the Government for re-consideration. Pursuant to the representations, one another notification was issued by the Central Government vide Notification No. 33/2008-CEdated 10.6.2008. Therefore, the original writ petitioners amended the writ petitions challenging the subsequent notification dated 10.6.2008 also. It appears that thereafter the Central Government vide notification No. 51/2008 dated 3.10.2008 revised the deemed value addition at 75% in respect of the products manufactured by the original writ petitioners without giving them any option of applying for a special rate. 3.9 The aforesaid writ petitions were heard by the Division Bench. The members of the Division Bench differed. One learned Judge allowed the writ petitions and another learned Judge held that the writ petitions deserve to be dismissed. In view of the difference of opinion between the two learned Judges of the Division Bench, the matter was referred to a third learned Judge. By the impugned judgment and order, the third learned Judge has agreed with the view taken by the learned Judge who allowed the writ petitions. Consequently, by the impugned judgment and order, the writ petitions are allowed mainly on the ground of doctrine of promissory estoppel. Consequently, it is held by the High Court that the incentive as originally envisaged by notification No. 39/2001-CE was required to be implemented and the differential amount was directed to be refunded to the writ petitioners. Hence, the present appeals. Civil Appeals @ SLP (C) Nos. 14751 of 2013, Civil Appeals @ SLP (C) Nos. 14752 of 2013 and Civil Appeals (a) SLP (C) Nos. 14753 of 2013;