Flexible utilisation of excise duty credit permitted where no clear bar prevents basic duty credit from paying additional excise duty.

Credit of basic excise duty could be used to pay additional excise duty where the credit scheme and contemporaneous circulars permitted flexible utilisation of specified duty credit. Although the notification was read as confining basic duty credit to duty leviable under the Central Excise Act and separately linking additional duty credit to corresponding additional duties, the Tribunal accepted that no clear bar prevented cross-utilisation. It also treated denial of that facility as inconsistent with the treatment available to other assessees. The assessee's claim was therefore accepted.

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Issues: Whether credit of basic excise duty could be utilised for payment of additional excise duty under the relevant notification.

Analysis: The notification confined credit of basic duty to payment of duty leviable under the Central Excise Act, 1944, while separately restricting credit relatable to additional duties for payment of the corresponding additional duties. On that reading, credit of basic duty was not shown to be available for payment of additional excise duty. However, the Tribunal also relied on the Board's circulars and earlier decisions recognising that the credit of specified duties could be utilised with flexibility and that it was not necessary that credit of a particular duty be used only against that same duty. Denial of that facility was treated as resulting in unequal treatment vis-a -vis other assessees who were permitted such utilisation.

Conclusion: The credit of basic excise duty could be utilised towards payment of additional excise duty, and the assessee's claim was accepted.

Ratio Decidendi: Where the scheme of credit utilisation and the contemporaneous circulars permit flexible use of specified duty credit, a restrictive reading that denies such utilisation without a clear bar is not warranted.

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