Patna High Court
Tata Yodogawa Limited And Anr. vs Union Of India (Uoi) And Ors. on 9 September, 1986
Equivalent citations: 1986(10)ECC320, 1987(11)ECR6(PATNA), 1987(32)ELT521(PAT)
JUDGMENT Prabhu Shanker Mishra, J.
1. A learned single Judge of this Court has referred these two cases to a Division Bench recording in his order, "I consider that the questions involved are of great significance and considerable importance." Except differing in a few descriptions and details about payment of the excise duty, these two cases involve common questions for determination. They have, accordingly, been heard by us one after the other and are being disposed of by this common judgment.
2. The petitioner in C.W.J.C. No. 337 of 1981 (R), namely, Tata Yodogawa Limited, Jamshedpur (hereinafter to be called as "Tayo") owns a factory at Adityapur in the city of Jamshedpur where ingots are manufactured out of the scraps received from the main works of the Tata Iron and Steel Company Limited (hereinafter described as "Tisco"), the petitioner in C.W.J.C. No. 338 of 1981 (R). They received the scraps under an agreement to convert the scraps belonging to the Tisco into steel ingots in which agreement the scraps as well as ingots remain the property of Tisco. The Tisco which obtain the scraps in their main works which is an integrated steel plant and admittedly the scraps fulfil the description of "fresh unused steel melting scrap" (hereinafter referred to as "the scraps") also convert scraps into ingots in one of their subsidiaries and from ingots received from Tayo and ingots produced by them, they manufacture various kinds of products like billets, blooms, etc. Besides receiving scraps from Tisco, Tayo also purchase scraps to make ingots for sale to other parties.
3. It is not in dispute that ingots produced by the petitioners answer the description of goods in item no. 26 of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as "the Act") and excise duty is leviable on the ingots at the rate specified therein. The Central Government exercising its powers conferred by sub-rule (1) of the Central Excise Rules, 1944 (hereinafter to be called as "the Rule") issued Notification No. 66 of 1973-C.E., dated 1-3-1973 (Annexure-1) exempting steel ingots falling under item no. 26 of the First Schedule to the Act from the whole of the duty of excise leviable thereon provided that: -
"(a) all such ingots are manufactured exclusively from fresh unused steel melting scrap on which the appropriate duty of excise leviable under the aforesaid item no. 26 of the said First Schedule has already been paid; and
(b) no set off or proforma credit has been availed of in respect of the duty paid on such steel melting scrap used in the manufacture of steel ingots."
It issued yet another Notification No. 150 of 1977-C.E. dated 18-6-1977 in exercise of the powers conferred by the said sub-rule exempting fresh unused, steel melting scraps of the types commonly known as (i) skull scraps, (ii) broken ingot moulds, (iii) butts and shorts, (iv) mould splashings which arise in steel melting shops, and (v) turnings and borings, falling under item no. 26 of the First Schedule to the Act from the whole of the duty of excise leviable thereon provided that: -
"(a) such fresh unused steel melting scrap is cleared direct from an integrated steel plant and it is proved to the satisfaction of an Officer not below the rank of an Assistant Collector of Central Excises that such scrap is intended to be used as melting scrap in the manufacture of steel ingots or semi-finished steel, as the case may be, by a manufacturer manufacturing such ingots or semi finished steel with the aid of electric furance, and
(b) the procedure set out in Chapter X of the Central Excise Rules, is follows."
4. Tisco who are liable to pay the excise duty on their steel products, do not dispute their liability to pay such duty in respect of the products which fall under item no. 26-AA of the First Schedule of the Act, but they refer to a notification issued by the Central Government vide Notification No. 152 of 1977-C.E., dated 18-6-1977, which says that the Central Government has exempted iron or steel products falling under item no. 26-AA of the First Schedule of the Act, and specified in column (2) of the table thereto annexed, from so much of the duty of excise leviable thereon as is in excess of the duty specified in the corresponding entries in column (3) of the said table, subject to the conditions laid down in the corresponding entries in column (4): thereof. Column (2) in serial no. 2 of the table mentions "all products falling under sub-item (ia) of item 26-AA (other than rails and sleeper bars specified in serial no. 3." In the proviso thereto it is stated as follows :-
"Provided that where the products mentioned in the Table are made from steel ingots, falling under item no. 26 of the aforesaid Schedule, which have been cleared from the factory, prior to the 18th day of June, 1977, on payment of duty at 'the appropriate rate, the duty specified in the corresponding entries in column (3) of the Table shall be reduced by two hundred rupees per metric tonne :
Provided further that where the products mentioned in the Table, other than bars and rods, falling under sub-item (ia) of item No. 26-AA referred to in serial no. 3 of the Table, are made from semifinished steel on which duty at the appropriate 'rate has already been paid, or from steel ingots falling under item no. 26 of the aforesaid Schedule which are cleared from the factory on or after the 18th day of June, 1977 on payment of duty, the duty specified in the corresponding entries in column (3) of the Table shall be reduced by three hundred and thirty rupees per metric tonne :
Provided also that where the duty paid on steel ingots or semifinished steel, as the case may be, used in the manufacture .of any quantity of the products mentioned in the Table is iii excess of duty leviable on such products, the amount eligible for adjustment towards the exemption shall be restricted to the amount of duty leviable on the quantity of the said products :
Provided also that in the case of the products mentioned in the Table and manufactured with the aid of electric furnace from and of the following material, namely :-
(i) old iron or steel melting scrap;
(ii) a combination of the material referred at (i) with fresh unused steel melting scrap on which the appropriate duty of excise has been paid; and
(iii) iron in any crude form falling under Item No. 25 of the said First Schedule on which the appropriate duty of excise has been' paid, in combination with the materials referred to at (i) and (ii) : the duty specified against the corresponding entries in column (3) of Table shall be reduced by three hundred and thirty rupees per metric tonne."
5. Apparently to answer certain doubts which had been created on various terms used in the Tariff Item Nos. 26 and 26AA of the First Schedule to the Act a clarification was made by the Central Government stating that , where duty on melting scrap is nil the manufacturers of ingots would be eligible for exemption under Notification Nos. 152 of 1977 and 153 of 1987. This notification has posed the question :-
"whether the expression 'fresh unused steel melting scrap on which-appropriate duty of excise has been paid appearing in the last proviso of the Notification No. 152/77-C.E., dated 18-6-1977 also covers the specified types of fresh unused steel melting scrap which are conditionally exempted under Notification No. 150/77-C.E., dated 18-6-1977."
and has been answered :-
"Assessment includes 'nil' duty and the expression 'paid' has to be construed to mean 'contracted to be paid' and it is not necessary that some amount of duty should have been assessed and actually paid for interpreting the said expression. Specified types of melting scrap which are exempted under Notification No. 150/77-C.E. are thus to be treated to have paid the appropriate duty of excise for eligibility to duty reduction in terms of the 4th proviso to each of the Notification Nos. 152/77-C.E. and 153/77-C.E- as amended."
6. The petitioners have alleged that understanding the law and knowing that the scraps satisfy the description of the notification of the exemption and the ingots also answer the descriptions fully, treated their steel ingots exempted from the excise duty and continued with that until a letter came from the Central Board of Excise and Customs on 18-8-1980 advising the Collector of Central Excise, Patna that the duty was leviable on ingots. Pursuant to the said advice, on 18-9-1980 the Deputy Collector of Central Excise, Patna issued a letter containing instructions to the officers concerned to levy duty on the ingots and on 9-2-1981 the Superintendent of Excise, Jamshedpur asked the petitioners to pay duty on steel ingots and to move a fresh classification list. The petitioners thereafter represented against the above order on 25-2-1981 but on 5-3-1981 the Superintendent of Excise, Jamshedpur approved the classification list regarding steel ingots without granting exemption, and on 6-3-1981 the Assistant Collector upheld the order dated 9-2-1981 of the Superintendent of Excise on the ground that the clarification issued by the Central Government stating that where the duty on melting scrap is nil the manufacturers of ingots would be eligible for exemption did not apply for exemption under Notification No. 66 of 1973.
7. Side by side it appears that the demands were made and in the case of Tayo it came on 17-2-1981 for the period September, 1980 to the 7th March, 1981, bearing No. 89376, for the period April, 1979 to August, 1980 bearing No. 98377, and for the period September, 1978 to March, 1979 bearing No. 89378. In the case of Tisco [C.W.J.C. No. 338 of 1981(R)] demand notice was given to them on 18-2-1981 for the period from 20-11-1978 to 18-6-1980 vide demand No. 89381, for the period from September, 1980 to 9-2-1981 vide demand No. 89379 and for the period from 19-6-1980 to August, 1980 vide demand No. 89380.
8. From the facts stated above it emerges clearly that the steel ingots answering the description specified in the Notification No. 66/73-C.E., dated 1-3-1973 were exempted from excise duty provided that on the scraps the appropriate duty of excise leviable had already been paid and by a notification issued on 18-6-1977 the scraps used for producing ingots were also exempted, as according to the petitioners, Tisco is an integrated steel plant and they manufacture ingots with the aid of electric furnace. Tisco's further submission is that it has no liability to pay any excise duty on the scraps in view of the exemption by a Notification dated 18-6-1977 and on other products from such steel ingots also they have the exemption in view of the notification dated 1-3-1973 and 18-6-1977.
9. In their return the respondents have hardly questioned any fact, but according to them, excise duty is leviable on the ingots manufactured as the scraps which they used were such on which the appropriate duty of excise had not been paid either. On such scraps or on ingots or on other products from ingots the Tisco is liable to pay the excise duty.
10. In view of the stand taken by the parties before us contentions are limited to the interpretation that they put to the words used in the notification dated 1-3-1973, namely, "on which the appropriate duty of excise leviable...has already been paid."
11. Mr. R.3. Hoshi, who has appeared for Tayo, and Mr. K.D. Chatterjee, who has appeared for Tisco, have contended that (i) the words "already been paid" appearing in the proviso to Notification No. 66/73 mast be read to mean, "required to be paid" or "ought to have been paid" or "contracted to have been paid" and that the assessment to nil duty on the scraps must mean duty already been paid; (ii) that the respondents are estopped from making any demand and are precluded by the principle of promissory estoppel from taking any steps or proceedings to recover any excise duty on the basis that their earlier representations were a mistake; and (iii) that the demands are barred by limitation prescribed under Section 11-A of the Act as also for the reason that as prescribed therein the respondents never served any notice calling upon them to show cause within six months of the date when the duty was allegedly short paid.
12. It has to be seen that the clarification in respect of the expression "fresh unused melting scraps" on which duty of excise has been paid, appearing in Notification No. 152/77, dated 18-6-1977 has made no reference to the Notification No. 66/73, dated 1-3-1973, yet one can notice in it the administrative construction for the said expression and by reference to contennporanea expositio apply the same meaning to the words in Notification No. 66/73 also. Before doing so, however, it has to be borne in mind that the petitioners have not denied their liability to pay the excise duty but have claimed exemption in terms of Notification No. 66/73. Until June, 1977 all types of steel melting scraps were assessable to the full rate of duty and in terms of Notification No. 66/73 those receiving scraps and manufacturing ingots were exempted subject to the duty paid by the transferer or as in the case of Tisco by paying duty on the scraps and thus claiming exemption from duty on the ingots. By Notification No. 150/77 fresh unused melting scraps of certain types only as specified therein were exempted from excise duty provided that :-
"Such fresh unused steel melting scrap was cleared direct from an integrated steel plant, was intended to be used as melting scrap in the manufacture of steel ingots and was so used by a manufacturer manufacturing steel ingots with the aid of electric furnace."
13. We have already noticed that it is not in dispute that Tisco is an integrated steel plant and the scraps were used in the manufacture of steel ingots with the aid of electric furnace both by Tayo and by Tisco. Although Notification No. 150/77 is not a general exemption for all fresh unused steel melting scraps, the petitioners may have a claim if they satisfy the condition that the duty leviable on the scraps had already been paid. Since the scraps so used by the petitioners were also exempted from the duty by Notification No. 150/77, the scraps were assessed to nil duty payment. The question thus naturally arises whether on such exemption and nil assessment, the ingots manufactured from the scraps by the petitioners, are liable to any excise duty or not. It is in this context that a clarification was needed and it was so needed to clarify the Notification No. 150/77 as also the Notification No. 66/73. The clarification came, but in it however, the words used in Notification No. 150/77 were taken for interpretation and, as noticed above, it was said that the assessment included nil duty and the expression "paid" had to be construed to mean "contracted to be paid" and it was not necessary that the same amount of duty had actually been assessed and actually been paid. The petitioners have asserted and the respondents have not denied that accepting the said interpretation to apply to the ingots manufactured by them, they (the petitioners) were exempted from payment of any duty until they received demand notices and it was only when further advice came from Central Board of Excise and Customs to the Collector of Central Excise, Patna on 18-8-1980 that they were asked to pay duty on the ingots.
14. In the letter addressed to the Collector of Central Excise, Patna, dated 18-8-1980 it has been stated that Notification No. 150/76 exempted fresh unused steel melting scraps from the whole of the duty of excise leviable thereon subject to the fulfilment of the conditions specified therein. If ingots were manufactured out of the scraps mentioned under Notification No. 150/77, duty exemption could not be availed of under Notification No. 66/73 as on the fresh unused steel melting scraps appropriate duty of excise had not been paid. It is further stated in the said letter that since no duty had been paid on the fresh unused steel melting scrap, no exemption could be allowed under Notification No. 66/73, dated 1-3-1973 and that the instructions contained in the Board's letter dated 30-8-1977 made it clear that the specified types of scraps which are exempted under Notification No. 150/77, were to be treated for eligibility to duty reduction in terms of fourth proviso to Notification Nos. 152/77 and 153/77.
15. I have already referred to the contents of the Notification No. 150/77. One cannot fail to notice that by the said notification certain specified types of fresh unused steel melting scraps have been exempted from duty, but by Notification No. 152/77 which too has already been noticed by me, the exemption has been extended to the products from steel ingots falling under Item No. 26 of the First Schedule of the Act. The stage at which the exemption in terms of the Notification No. 152/77 can be availed of is after the scraps are converted into ingots and the ingots thus become available for conversion into other items manufactured by the petitioners. It is obvious, therefore, that no exemption can be claimed in terms of the Notification No. 152/77 unless the duty is paid on the ingots and any exemption of ingots has to be claimed only in terms of Notification No. 66/73. No exemption can be claimed under Notification No. 66/73 unless the duty is paid on the scraps and we have already said that such exemption can be claimed for scraps under Notification No. 150/77.
16. In the case of Cape Brandy Syndicate v. Inland Revenue Commissioners, 1921-8 KB 64(71), rule of construction applicable to the taxing statute has been stated in the following words :-
"In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used."
In the case of A.V. Fernandez v. State of Kerala, AIR 1957 S.C. 657 the law has been stated by the Supreme Court in the following words :-
"If...the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter."
As to the interpretation of such statute, in the case of Gursahai Saigal v. Commissioner of Income-tax, Punjab, AIR 1963 S.C. 1062, the Supreme Court has gone a step further and has stated :-
"...The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective....We do not here have to resort to any equitable rule of construction or to alter the meaning of the language used or to add to or vary it in order to arrive at the conclusion that the provision intended to impose a liability to pay interest...."
17. In yet another case the very words with which we are concerned fell for interpretation before the Supreme Court in the case of N.B. Sanjana v. The Elphinstone Spinning and Weaving Mills Co. Ltd., AIR 1971 S.C. 2039. A rule which said:
"Recovery of duties or charges short-levied, or erroneously refunded - When duties or charges have been short-levied through in-advertance, error, collusion or mis-construction on the part of an officer, or through mis-statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short-levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owner's account-current, if any, or from the date of making the refund."
had fallen for interpretation. The Supreme Court has by the said pronouncement, established two propositions :
(1) Expression "paid" in the context of a particular statute may mean "ought to have been paid" and (2) Nil assessment may mean "assessed to duty". It has referred to a judgment of the Court of Appeal in the case of Allen v. Thorn Electrical Industries Ltd., (1968) IQ-B-487-7 and has said :
"The literal meaning of the expression 'paid' as actually paid in cash has again not been adopted by the Court of Appeal in the case of Allen v. Thorn Electrical Industries Ltd. (1968) 1 Q B 487. Having regard to the context in which the said expression appeared in the particular provision which came up for interpretation, the Court of Appeal construed the said expression to mean 'contracted to be paid'."
18. The expression "paid" in the rule quoted above was given a meaning in the context of the law under consideration by the Supreme Court and it found no error in reading the expression "paid" as "ought to have been paid". The law stated by the Supreme Court without any ambiguity makes one aware that the literal meaning of the expression "paid" as actually paid in cash need not be accepted.
19. Coming closer to the facts of this case, there is yet another decision by the Supreme Court in the case of Assistant Collector of Central Excise, Calcutta v. National Tobacco Co. of India Ltd., AIR 1972 S.C. 2563 Considering Rule 10 of the Rules, the Supreme Court has stated as follows :
"The term 'levy' appears to us to be wider in its import than the term 'assessment'. It may include both 'imposition' of a tax as well as assessment. The term 'imposition' is generally used for the levy of a tax or duty by legislative provisions indicating the subject matter of the tax and the rates at which it has to be taxed. The term 'assessment' on the other hand, is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax on account of particular goods or property or whatever may be the object of the tax in particular case and determining its amount. The Division Bench appeared to equate 'levy' with an 'assessment' as well as with the collection of a tax when it held that 'when the payment of tax is enforced, there is a levy'. We think that, although the connotation of the term 'levy' seems wider than that of 'assessment', which it includes, yet, it does not seem to us to extend to 'collection' Article 265 of the Constitution makes a distinction between 'levy' and 'collection'. Article 265 of the Constitution makes a distinction between 'levy' and 'collection'. We also find that in N.B. Sanjana v. The Elphinstone Spinning & Weaving Mills Co. Ltd. AIR 1971 S.C. 2039 this Court made a distinction between 'levy' and 'collection' as used in the Act and the Rules before us. It said there with reference to Rule 10 :
"We are not inclined to accept the contention of Dr. Syed Mohammed that the expression "levy" in Rule 10 means actual collection of some amount. The charging provision Section 3(1) specifically says, "There shall be levied and collected in such a manner as may be prescribed the duty of excise.... "It is to be noted that Sub-section (i) uses both the expressions "levied" and "collected" and that clearly shows that the expression "levy" has not been used in the Act or the Rules as meaning actual collection'."
20. One need not dilate and enter into a quest of authority on the subject as in the case of Sulekh Ram & Sons v. Union of India and Ors., 1978 ELT (J 525) 1978 Cen-Cus 174D the Delhi High Court has considered the effect of the expression "duty already paid" in a similar Notification No. 206/63 and has stated :
"If the excise duty on the re-rollable scrap was payable only by the Hindustan Steel Ltd., namely, the manufacturer and never by the petitioner, namely, purchaser, what would be the meaning to be attached to the word 'already' in the notification granting the exemption? If this word is used to mean 'actually' then the exemption would not be available to the petitioner in the present case. Such a construction would, however, be contrary to the system of recovery and levy of excise duty under the Act and the Rules. This system secures that in all cases excise duty is recovered from the manufacturer before the goods are removed from the factory premises. Purchasers of goods from such a manufacturer are entitled to rely upon the system and to presume that the duty had already been recovered from the manufacturer. The exemption authorities issued instructions to purchasers of re-rollable scrap that goods manufactured by such purchasers from re-rollable scrap could be removed from the premises of such purchasers without observing the procedure prescribed by Rule 9(1).
It would be intolerable if the purchasers of manufactured goods were to be required to ascertain whether excise duty on the manufactured goods had already been paid by the manufacturer before the sale of such goods or not. Purchaser would have no means of knowing it. Hundreds and thousands of purchases of such goods are made and in no case can any attempt be made by the purchaser to know this fact from the manufacturer. This is why the Excise Authorities allowed the petitioner and other persons manufacturing goods from re-rollable scrap to remove their goods from their premises without following the procedure under Rule 9(1) and without payment of duty under Item No. 26AA(ia) of the First Schedule. In view of this context it would be proper to construe the words 'already paid' to mean that the excise duty must have been paid at a prior stage or ought to have been paid at a prior stage. They do not mean that the excise duty was actually paid at a prior stage."
21. The very same meaning has been extended to the expression "already paid" by the High Court of Gujarat (sic) in the case of Steel Authority of India v. Collector of Central Excise, Calcutta, 1984 (18) ELT 555. Although interpreted in a different context and for the reasons stated in the judgment, Deshpande, 3. (as he then was in the Delhi High Court) has noticed the relevance of interpreting the words "already paid" to mean "contracted to be paid" or "ought to have been paid", there is no reason why the same meaning be not given to the words used in Notification No. 66/73 when in the hands of Tayo the scraps were in the capacity of a transferee for the purpose of manufacturing ingots and even in the hands of the Tisco who may have the liability to pay duty on the scraps, since the scraps answered the requirement of the description in the said notification, no duty was payable by them on the ingots.
22. Proceeding further, Notification No. 150/77 has exempted from duty even the scraps and when a duty paid may mean a duty contracted to have been paid on the exemption by Notification No. 150/77, the Tisco may be said to have contracted the said duty and thus have paid it to satisfy the requirement of Notification No. 66/73. To this interpretation one can find support from contemporanea expositio by the respondents. It is well settled that the administrative construction, i.e., contemporaneous construction placed by administrative or executive officers charged with executing a statute generally should be clearly accepted as they do it and follow it realising the true purport of the law. The exemptions are exceptions introduced by the notifications and when they interpreted the notifications, initially did not make any demand of duty from the petitioners in respect of the ingots manufactured by them. For them, the words "already paid" could not have one meaning to interpret Notification No. 150/77 and another to interpret Notification No. 66/73.
23. The advice contained in the letter dated 18-8-1980 of the Central Board of Excise and Customs to the Collector of Central Excise, Patna has neither stated the context nor any reason not to give the same meaning to the words "already paid" used in Notification No. 66/73 as one given to the words in Notification No. 150/77. There is apparently no reason to extend the exemption and apply the above interpretation to Notification No. 152/77 and not to Notification No. 66/73. In their submissions before us the respondents have failed to give any cogent reason for not acknowledging in the words "duty already paid" the meaning "the duty contracted to have been paid".
24. Since I have taken the view that "the duty already paid" used in Notification No. 66/73 must on the facts of this case, mean "the duty contracted to have been paid", no consideration of other contentions raised by the learned counsel is necessary. I do, however, feel duty bound to say that the law of the land has recognised as a rule enshrined in the conduct of the State the rule of promissory estoppel.
25. In the case of Motilal Padampat Sugar Mills Co. Ltd. v. The State of Uttar Pradesh and Ors., AIR 1979 S.C. 621 doctrine of promissory estoppel has been extended to apply to the statutes which in the words of Bhagwati, J. is a principle evolved by equity to avoid injustice and though commonly named "promissory estoppel" is neither in the realm of contract nor in the realm of estoppel. Where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective [of] whether there is any pre-existing relationship between the parties or not.
26. It has been extended to a case of assessment of excise duty by the Supreme Court in the case of Union of India and Ors. v. Godfrey Philips India Ltd. 1985 AIR 1985 SC 806. The Supreme Court has said that the doctrine of promissory estoppel is applicable against the Government in exercise of its Governmental, public or executive function and the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel. Of course there can be no promissory estoppel against the legislature in the exercise of its legislative functions nor can the Government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition. It is equally true that promissory estoppel cannot be used to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. The doctrine of promissory estoppel being an equitable doctrine, it must yield when the equity so requires, if it can be shown by the Government or public authority that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority bound by the promise or representation made by it, the Court would not raise equity in favour of the person to whom the promise or representation is made and enforce the promise or representation against the Government or public authority. The doctrine of promissory estoppel would be displaced in such a case. But once it is found from their conduct otherwise the Government and other public authorities realised the purport of law and acted accordingly, later it would be inappropriate to allow them to go back from their words. It is in this context that the rule of promissory estoppel may reasonably be applied in the instant case and the respondents may be asked to desist from demanding duty from the petitioners without showing that they are obliged to do so under a law that commanded them to act and also commanded the petitioners to pay duty.
27. The last but not the least is an argument which too must fairly be considered and disposed of. It has been urged before us by the learned counsel for the petitioners that assuming that the duty was not levied although it was so required to be levied in terms of Item No. 26 and Item No. 26AA of the First Schedule to the Act the respondents could not realise the same without following the procedure laid down in Section 11A of the Act. Section 11A(1) of the Act says as follows :
"When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, a Central Excise Officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice :
Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if for the words 'six months', the words 'five years' were substituted."
It is not in dispute that no notice to show cause was given to the petitioners within the statutory period of six months for any of the demands.
28. The learned counsel for the State has, however, submitted that in the instant case the words "six months" should be read as "five years" as the duty was not levied upon or paid by the petitioners by reason of fraud, collusion and wilful mis-statement and suppression of facts. He has submitted that even if no case of fraud, collusion, wilful mis-statement or suppression of fact is found, it is a clear case of contravention of the provisions in Item No. 26 of the First Schedule of the Act and, therefore, the notice served upon the petitioners within five years is well within time. It is not possible, however, to accept the contention of the learned counsel for the respondents for the simple reason that there could be no contravention by the petitioners when the scraps were, as noticed above, assessed to nil duty and on ingots they claimed exemption under Notification No. 66/73. There is no case of fraud, collusion, wilful mis-statement and/or suppression of facts before us. The respondents were obliged in terms of Section 11A of the Act to serve a notice upon the petitioners to show cause and since no notice was served upon them within the statutory period of six months, they are not liable to pay the demands in question.
29. Before I part with this judgment I may refer to the argument advanced by the learned counsel for the respondents on the ground of alternative remedy to the petitioners which they should avail of. It is clearly a case in which the petitioners were banking upon the-interpretation given to the words "duty already paid" in the notification issued by the Central Government about the exemption under Notification Nos. 1.52/77 and 153/77 and up till February, 1981, as stated above, they were allowed to avail .the exemption. It was Central Board of Excise and Customs which turned the table by advising the Collector of Central Excise, Patna to levy duty in respect of the ingots and the demands were served upon the petitioners.
30. It is well settled that .a party should not be asked to seek alternative remedy .once the Application is admitted for hearing by the Court. Apart from that, any action which is without any, authority of law or without jurisdiction, can. be directly questioned before this Court and for that no alternative remedy can be found in any statute. Once it is noticed that certain authority has acted without any authority of law or without jurisdiction, it is obvious that the party affected by the action has no alternative remedy, to move the court of law. Such observations have been made repeatedly by this Court and more than once the Supreme Court has said that if such action is taken under invalid law or without jurisdiction no person can be denied his right to invoke the jurisdiction of the Court in exercise of its power under Article 226 of the Constitution of India merely because some alternative remedy is suggested by the respondents.
31. Having considered the case in all its aspects, I am of the view that the petitioners are not liable to pay any excise duty on the ingots which have been manufactured from the scraps which answered the descriptions in Notification No. 66/73-C.E. and on other articles manufactured from the ingots by them in terms of Notification No. 152/77. The petitioner-Tisco is exempted from any excise duty on the scraps in terms of Notification No. 150/77-C.E. They have accordingly no liability to pay the demands.
33. In the result the two writ applications are allowed, the demands contained in Annexures V 5 and 6 in C.W.3.C. No. 337 of 1981(R) and Annexures 5, 6,7 and 8 in C.WJ.C. No. 338 of 1981(R) are hereby quashed and the respondents are restrained from demanding any excise duty from the petitioners and treat the scraps ingots and other articles produced from the ingots exempted so long the above three notifications are in force. Let a writ in the nature of certiorari and consequential mandamus accordingly be issued. The respondents shall pay to the petitioners the costs of litigation, hearing fee Rs. 250/- only.
Madan Mohan Prasad, J.
I agree.