Accrued credit under a concession scheme cannot be withdrawn arbitrarily when no overriding public interest is shown.

A credit scheme under Rule 57K of the Central Excise Rules, 1944 allowed credit for use of non-traditional oils in Vanaspati manufacture on compliance with scheme conditions. The petitioners changed position by using the notified inputs and earning credit before rescission of the exemption notification. The court noted that the rescinding notification was issued and withdrawn without any material showing change of circumstances, public interest, or other objective basis to deprive them of accrued credit. In that setting, the State was required to act fairly and could not arbitrarily extinguish a benefit already earned under the scheme.

---

---

Issues: Whether the petitioners were entitled to utilise credit earned under the scheme, despite rescission of the exemption notification, on the basis of promissory estoppel and the absence of any shown public interest.

Analysis: The credit scheme under Rule 57K of the Central Excise Rules, 1944 granted a concession for use of non-traditional oils in the manufacture of Vanaspati and contemplated earning of credit on compliance with the scheme conditions. The petitioners altered their position by using the notified inputs and accumulating credit before rescission. The rescinding notification was found to have been issued and withdrawn again without any material showing change of circumstances, public interest, or objective basis to deprive the petitioners of credit already earned. In such circumstances, the State was held bound to act fairly and could not arbitrarily efface the accrued benefit.

Conclusion: The petitioners were entitled to utilise the credit already earned under the earlier notification, and the rescission could not defeat that accrued entitlement.

Ratio Decidendi: Where a Government concession scheme induces a party to alter its position and no overriding public interest is shown, the State cannot arbitrarily withdraw the benefit so as to deprive the party of credit already earned under the scheme.

---