Accrued excise credit cannot be withdrawn retrospectively; promissory estoppel protects entitlement under the earlier scheme.

Credit earned under an existing excise incentive notification could not be withdrawn retrospectively by a later notification, because the benefit had already accrued while the earlier scheme remained in force. The Court applied promissory estoppel against the Union, holding that the assessee had altered its position on the basis of the notified credit scheme and the accrued entitlement could not be defeated by subsequent withdrawal. However, no concession was available for the period after the withdrawal notification came into force. The assessee was entitled to utilise the credit earned up to 24-8-1989 and to refund of any duty recovered in excess of what was payable under the earlier notification.

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Issues: Whether the withdrawal notification could operate retrospectively so as to deny credit already earned under the earlier scheme, and whether the petitioner was entitled to utilise the accumulated credit and obtain refund of excess duty, if any.

Analysis: The earlier notification under Rule 57K of the Central Excise Rules, 1944 granted credit on the use of specified vegetable oils in the manufacture of vanaspati. The subsequent notification withdrawing that benefit was already held in a similar matter not to have retrospective effect. The Court accepted that the credit earned while the earlier notification remained in force had accrued to the petitioner and could not be taken away by the later withdrawal. The Court also applied promissory estoppel against the Union of India, since the scheme had induced the petitioner to act on the basis of the promised credit. At the same time, the Court clarified that the petitioner could not claim any concession for the later intervening period after the withdrawal notification came into force.

Conclusion: The petitioner was entitled to utilise the credit earned up to 24-8-1989 and to refund of any duty recovered in excess of what was payable under the earlier notification. The withdrawal notification was not allowed to defeat the accrued credit.

Ratio Decidendi: Credit validly earned under an existing excise incentive notification cannot be taken away retrospectively by its withdrawal, and the State is bound by promissory estoppel where the assessee has altered its position on the basis of the notified scheme.

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