Prospective operation of customs circulars bars retrospective withdrawal of already granted brand rate drawback benefits.

A later administrative circular could not retrospectively withdraw brand rate drawback already granted under earlier valid circulars and letters. The Court applied the principle that Board instructions operate prospectively unless expressly made retrospective, and that accrued benefits under the earlier regime cannot be unsettled by a subsequent circular. Relying on the prior Division Bench view, affirmed by the Supreme Court, the Court held Circular No. 39/2001-Cus. to be prospective only. The revocation letters issued on that basis were unsustainable, and the earlier drawback benefit remained intact.

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Issues: Whether Circular No. 39/2001-Cus. dated 06.07.2001 could be applied retrospectively so as to revoke the brand rate of drawback already granted under earlier circulars and letters.

Analysis: The petitioner had already obtained brand rate drawback benefits under the earlier policy framework and the relevant earlier circulars. The challenge to the revocation letters rested on the contention that the later circular only clarified the position and could not unsettle completed claims. The Court followed the principle that the later circular, being a Board instruction, would operate only from its date and could not take away benefits already accrued under the earlier regime. The conclusion was reinforced by the prior Division Bench ruling, which had held that Circular No. 39/2001-Cus. is prospective, and by the affirmation of that view by the Supreme Court.

Conclusion: Circular No. 39/2001-Cus. was held to be prospective only, and the revocation of the already granted brand rate drawback on that basis was unsustainable.

Final Conclusion: The impugned revocation letters were set aside and the writ petitions succeeded, leaving the earlier drawback benefit intact.

Ratio Decidendi: A later administrative circular cannot retrospectively withdraw or revoke a drawback benefit already granted under an earlier valid circular, unless the circular itself is expressly made retrospective.

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