Promissory estoppel bars withdrawal of an excise rebate when the Government's promised exemption was relied upon and acted on.

A governmental excise rebate granted under statutory exemption power and held out for a fixed period was enforceable once the recipient altered its position and made investments in reliance on that assurance. Promissory estoppel applied against the Government because the promise was within its authority and had been acted upon. A later withdrawal notification issued before expiry of the promised period was invalid, as a bare claim of public-interest review, unsupported by particulars or material, was insufficient to defeat the earlier representation. The Delhi HC quashed the withdrawal and upheld enforcement of the original exemption scheme.

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Issues: Whether the Central Government was bound by promissory estoppel to continue the excise rebate granted by the exemption notification and whether the withdrawal of the rebate by the later notification was valid.

Analysis: The rebate was granted under the exemption power contained in rule 8(1) of the Central Excise Rules, 1944, and was held out as an incentive scheme for a fixed period. The petitioner altered its position and made investments in reliance on that representation. The doctrine of promissory estoppel was held applicable against the Government where a promise within its authority has been acted upon. A bare assertion that the scheme was later reviewed and withdrawn in public interest was held insufficient in the absence of particulars or supporting material. The withdrawal notification, issued before the expiry of the promised period, could not defeat the assurance already given.

Conclusion: The withdrawal of the excise rebate was invalid and the petitioner was entitled to enforcement of the original exemption scheme.

Final Conclusion: The impugned withdrawal was quashed and the writ petition succeeded on the basis that the Government was held to its earlier promise.

Ratio Decidendi: Where a governmental exemption or rebate granted under statutory power is acted upon and the promisee alters its position, the Government cannot withdraw the benefit before the promised period expires unless a legally sufficient justification is shown.

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