Excise credit under a rescinded notification survives, but successive credits cannot be clubbed beyond the prescribed clearance limit.

Credit accrued under a rescinded concessional excise notification survives rescission, but its utilisation remains governed by the terms of the notification that created it. Under Rule 57K and Rule 57N, the earlier credit could be used only within the prescribed ceiling for each clearance, and a later notification created a separate credit entitlement subject to its own conditions. The two credits could not be clubbed together for the same clearance to exceed the applicable limit. The result is that accrued credit remains valid, but successive notification-based credits must be applied independently and within their respective restrictions.

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Issues: Whether credit accumulated under a rescinded exemption notification under Rule 57K of the Central Excise Rules, 1944 could continue to be utilised, and whether such accumulated credit could be used simultaneously with credit earned under a subsequent notification for the same clearances.

Analysis: Rule 57K allowed credit only in accordance with the terms of the notification issued by the Central Government, and Rule 57N governed its utilisation towards duty on final products. The earlier notification expressly limited utilisation to Rs. 1,000 per tonne on each individual clearance. Rescission of the notification did not destroy credit already validly accrued, but the accumulated credit remained bound by the conditions of that notification. A fresh notification issued later created a separate and independent credit entitlement, again subject to its own limit. The earlier High Court decisions did not decide that credits under both notifications could be clubbed together for the same clearance.

Conclusion: The assessee could utilise credit already accrued under the rescinded notification and could also earn credit under the later notification, but could not simultaneously combine both credits to exceed the prescribed limit for a single clearance. The challenge failed and the dismissal was upheld.

Ratio Decidendi: Credit earned under a concessional excise notification survives its rescission, but its utilisation continues to be controlled by the conditions of the notification that created it, and separate credits under successive notifications cannot be simultaneously clubbed contrary to the prescribed ceiling.

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