Accrued Cenvat credit survives rescission of the scheme notification, preserving the assessee's right to utilise accumulated balance.

Credit validly earned under a statutory scheme was treated as an accrued and vested entitlement, so rescission of the notification introducing the scheme did not extinguish credit already standing in the assessee's account. The revenue's contention that the balance had lapsed on rescission was rejected, and the assessee was held entitled to utilise the accumulated credit. The demand, penalty, and denial of utilisation were set aside.

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Issues: Whether the money credit lying in the assessee's balance under the erstwhile credit scheme lapsed on rescission of the relevant notification and could thereafter be denied utilization.

Analysis: The issue was governed by the settled principle that credit earned under a statutory scheme constitutes an accrued and vested entitlement. The Tribunal relied on the view that rescission of the notification introducing the credit scheme did not extinguish credit already validly earned and standing to the assessee's account. The earlier decisions recognizing the manufacturer's right to utilize such accumulated credit were followed, and the revenue's contention that the balance stood forfeited on rescission was rejected.

Conclusion: The assessee was entitled to utilize the balance credit and the credit did not lapse. The demand, penalty, and consequential denial of utilization were set aside.

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