MODVAT concession withdrawal upheld against challenge based on arbitrariness, discrimination, and promissory estoppel.

Withdrawal of a fiscal concession under the MODVAT scheme was upheld in relation to aerated waters and soft drinks falling under Chapter 22 of the Central Excise Tariff Act, 1985. The challenge based on arbitrariness, discrimination, promissory estoppel, and Articles 14 and 19(1)(g) failed because earlier decisions had already sustained the same notification and rejected those grounds. The court agreed that a notification could withdraw MODVAT benefit without illegality merely because it altered an earlier fiscal advantage.

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Issues: Whether Notification No. 203/87 dated 9-9-1987, withdrawing MODVAT benefit from aerated waters and soft drinks falling under Chapter 22 of the Central Excise Tariff Act, 1985, was arbitrary, discriminatory, hit by promissory estoppel, or violative of Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The challenge was directed against withdrawal of a fiscal concession earlier extended to the petitioners' products under the MODVAT scheme. The Court treated the controversy as covered by prior decisions upholding the same notification and the same class of challenge. Those decisions had rejected the pleas based on promissory estoppel, arbitrariness, and discrimination, and had held that withdrawal of the concession under the MODVAT framework did not suffer from illegality. On that basis, and in agreement with the earlier rulings, the Court found no reason to reopen the merits of the challenge.

Conclusion: The notification was upheld and the challenge failed.

Ratio Decidendi: A fiscal concession under the MODVAT scheme can be withdrawn by notification, and such withdrawal is not invalid merely because it alters an earlier benefit or is alleged to be arbitrary, discriminatory, or contrary to promissory estoppel.

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