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Judgment
A.N. Ray, C.J.—This is a writ application made at the instance of a proprietorship concern of the writ petitioner who is a resident with his family at Gujarat and who came to Sikkim and set up in 2006 a unit for producing Pan Masala marked "123" at a cost of a little under Rs. 3 crore.
The unit employs 18 persons.
The whole purpose of travelling the entire breadth of the country for the writ petitioner was that a unit for production of Pan Masala was economically viable in Sikkim, since the combined effect of certain Notifications including those of 2002 (Page 44) and 2003 (Page 46) purported to give exemption, amongst others, to new Pan Masala product units set up here from Central Excise for a period of 10 years from the date of commencement of production.
A later Notification made certain exceptions in regard to the earlier two notifications granting exemption to a new industry, but those exceptions related to tobacco and tobacco related products like, cigars, cigarettes and gutkha; branded aerated waters; paper and paper products.
Pan Masala was not taken out of the ambit.
The writ petitioner set up the industry at Jorethang, employed the above mentioned number of employees, started production and cleared his Pan Masala products without payment of Central Excise from June 2006 to April, 2007.
The impugned Notification thereafter was issued on or about 25th April, 2007 (Page 60 which purports to take out Pan Masala units from the scope of the exemption.
The writ petitioner submits that if Central Excise is to be paid, the unit becomes economically non-viable. Further submission is that the production has now been stopped because of its economic implications and that the 18 employees have written to the Labour Department about their woes, but we are not directly concerned with that here.
The case of estoppel is set up. The preliminaries attracting the doctrine of estoppel are certainly all there. There is substantial investment. There is a case that without the exemption the investment would not have been made because it would not have been economically viable. There is certainly alteration of position since a person has travelled from Gujarat to Sikkim to avail himself of the exemption only. And he has the unit on his hand, employees and all.
The only point which the Central Government might plead in support of the impugned Notification of 25th April 2007 is that public policy demanded the exemption of Pan Masala product units to be removed. But that pleading is yet to be made and that pleading is yet to be supported.
The withdrawal of exemption, has come so extremely close upon the setting up of the writ petitioner''s industry, that an interim order is most certainly called for. The writ petitioner is a solvent person and the whole unit is here in Sikkim. If any unpaid Central Excise amount is ultimately found to be due and outstanding, because of clearance made without payment of Central Excise, on the basis of the Court''s interim order, the recovery is not likely to pose a problem at all.
The recovery will pose little problem, if and only if the Central Government is active in the following way.
Liberty is being reserved, as mentioned below, for them to make an application for variation, vacating or reversal of the interim order which is being passed today, and they will be entitled to bring materials on their interim application itself before the Court which might entitle them to obtain such a variation of interim order. If they are dissatisfied with the interim order they should come with the materials expeditiously and try to obtain of a stay of the interim order to be passed today so that the clearance without payment of Central Excise is kept at a minimum. If they delay, and the purported Central Excise dues accruing to them mount up, and recovery poses a problem later on, they will have only themselves to blame.
The writ petition is admitted. It will be heard by a Division Bench hereafter as far as that is practicable and possible. But in case of urgency the Rules and usual practice might to be bent a little, as today. There will be Rule as prayed for in terms of prayers (A), (B), (C) and (D), although, the prayer for Rule in terms of those final substantial orders is not included in the prayer portion. There will be an interim order in terms of prayer (E) of the writ petition until further orders of Court.
The respondents, who are represented by the Assistant Solicitor General will be at liberty to apply for variation or vacating of this order as and when they might be so advised, even if the writ petition itself is then not ready for hearing. As the respondents are all before the Court, no further notice be issued or formal Rule drawn up; waiver in this regard is made. Affidavit in opposition be filed on or before 27-11-2007 which is the date asked for by the learned Counsel for the respondents. Reply thereto within two weeks thereafter. The matter be listed for hearing before the Division Bench on the first available working day after the said day. Liberty to mention reserved for both the sides either before the Division Bench or before any Single Bench as the necessity of the case might dictate.
Order and observations are without prejudice to final decision.