2017 (1) TMI 412 - AT - Central Excise

Whether unutilized deemed credit lying in balance availed under N/N. 6/2002-CE(NT) dt. 1.3.2002 will be allowed to be utilized for clearance of goods after 1.4.2003 in the light of N/N. 8/2003-C.E.(NT) dt. 1.3.2003 by which provision of deemed credit was withdrawn? - Held that - the accumulated deemed credit lying on 31.3.2003 were admittedly availed prior that date when the N/N. 6/2002-CE(NT) was in force. Therefore the credit availed under the authority of law. There was no provision either for lapsing the accumulated credit balance as of 31.3.2003 or reversal thereof - in the absence of any provision the credit which was legally availed, cannot be lapsed or to be reversed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether unutilized deemed credit under Notification No. 6/2002-CE(NT) can be utilized after withdrawal under Notification No. 8/2003-C.E.(NT).

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai involved the issue of whether unutilized deemed credit under Notification No. 6/2002-CE(NT) could be utilized for goods clearance post the withdrawal under Notification No. 8/2003-C.E.(NT). The appellant's counsel argued that this issue had been addressed in previous judgments, making it a settled matter. The counsel relied on several judgments, including S.V. Business Put. Ltd. case upheld by the Bombay High Court and the Supreme Court, Commissioner of C.Ex., Ahmedabad-ll Vs. Omkar Textile Mills Pvt. Ltd. case upheld by the Supreme Court, among others. The Revenue's representative reiterated the findings of the impugned order.

Upon careful consideration of the submissions, the Tribunal found that the accumulated deemed credit as of 31.3.2003 was availed under the authority of law before the withdrawal of Notification No. 6/2002-CE(NT). As there was no provision for lapsing or reversal of this credit balance, the legally availed credit could not be denied or reversed. Citing the judgments mentioned by the appellant's counsel, the Tribunal held that the credit availed under the authority of the notification cannot be denied if it remains in balance after the notification's recession. Relying on the precedent set by the previous judgments, the Tribunal set aside the impugned order and allowed the appeal.

This judgment, delivered on 06/12/2016 by Mr. Ramesh Nair and Mr. C.J. Mathew, provides clarity on the utilization of unutilized deemed credit under specific notifications, emphasizing the legal validity of such credits even after the withdrawal of relevant notifications.