Prospective withdrawal of excise permission cannot undo completed processing, making the duty demand unsustainable.

Permission granted for procurement and processing of nylon yarn under Rule 191-BB and Notification No. 33/90-C.E. (N.T.) could not be withdrawn retrospectively in the absence of any breach of the attached conditions. The later communication withdrawing permission stated that it would take effect immediately, and the clearance and processing in dispute had already been completed while the earlier permission remained operative. On that basis, the subsequent withdrawal could not invalidate acts lawfully done before it, and no retrospective power was shown to undo the earlier permission. The duty demand on nylon yarn and tyre cord fabric was therefore unsustainable.

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Issues: Whether the withdrawal of permission granted for non-payment of excise duty operated retrospectively or only prospectively, and whether the consequent duty demand on nylon yarn and tyre cord fabric could be sustained.

Analysis: Permission had been granted for procurement and processing of nylon yarn under Rule 191-BB and Notification No. 33/90-C.E. (N.T.), and the record did not show any breach of the conditions attached to that permission. The later communication withdrawing the permission expressly stated that it would take effect immediately. The clearance and processing in dispute had already been completed while the earlier permission was in force. In these circumstances, the subsequent withdrawal could not invalidate acts lawfully done before the withdrawal, and no retrospective power to undo the earlier permission was shown.

Conclusion: The withdrawal was only prospective, and the demand of duty on nylon yarn and tyre cord fabric was unsustainable; the issue is answered in favour of the assessee.

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