Promissory estoppel can protect accrued excise exemption benefits despite rescission when reliance and public interest limits are absent.

Promissory estoppel may protect an accrued exemption benefit where a company has altered its position by substantial investment in reliance on a government incentive notification, and no overriding public interest or legal bar is shown to justify withdrawal. A notification issued under delegated rule-making power is subordinate legislation, but that character does not by itself exclude estoppel when a clear representation has been acted upon. The commentary notes that, on these principles, the rescission of the exemption was treated as unenforceable against the petitioner and refund of excess duty for the relevant period followed.

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Issues: (i) Whether the petitioner-company was entitled to the full benefit of incentives under Notification No. 88/84 on the doctrine of promissory estoppel notwithstanding rescission by Notification No. 159/85. (ii) Whether a notification issued under Rule 8(1) of the Central Excise Rules, 1944 is legislative in character so as to exclude the doctrine of promissory estoppel.

Issue (i): Whether the petitioner-company was entitled to the full benefit of incentives under Notification No. 88/84 on the doctrine of promissory estoppel notwithstanding rescission by Notification No. 159/85.

Analysis: The petitioner had altered its position by making substantial investment in plant and machinery and had been certified by the DGTD as eligible for the incentive under Notification No. 88/84. The incentive scheme was time-bound and the benefit had accrued for the prescribed period. No overriding public interest or legal bar was shown to justify withdrawal of the accrued benefit in the petitioner's case.

Conclusion: The petitioner-company was entitled to the full benefit of Notification No. 88/84, and the rescinding notification was unenforceable against it.

Issue (ii): Whether a notification issued under Rule 8(1) of the Central Excise Rules, 1944 is legislative in character so as to exclude the doctrine of promissory estoppel.

Analysis: A notification under the rule-making power was treated as subordinate legislation, but that character did not by itself defeat the application of promissory estoppel where the Government had made a representation, the representation had been acted upon, and no sufficient public interest was established to justify departure from it. The Court applied the doctrine to the notified exemption scheme on the facts before it.

Conclusion: The notification was held not to be beyond the reach of promissory estoppel in the circumstances of the case.

Final Conclusion: The rescission of the exemption was quashed as against the petitioner, and the petitioner was held entitled to refund of the excess duty paid during the relevant period.

Ratio Decidendi: Promissory estoppel can operate against a Government notification issued as subordinate legislation when a clear representation has been acted upon and no overriding public interest or statutory prohibition justifies withdrawal of the accrued benefit.

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