Unutilised duty credit may be adjusted against the duty liability actually paid through PLA when cross-utilisation is blocked by the scheme.

Unutilised AED (T&TA) credit earned on duty-paid inputs was held adjustable against AED (GSI) where the assessee could not cross-utilise it for the intended liability because of the credit scheme in force. Applying the earlier tribunal view and the principle that credit should not be denied when non-utilisation arises from circumstances beyond the assessee's control, the credit was treated as available for adjustment against duty discharged through PLA. The authorities were directed to recast RG23A Part II and PLA accordingly.

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Issues: Whether the assessee was entitled to adjust unutilised AED (T&TA) credit towards payment of AED (GSI) and to have RG23A Part II and PLA recast accordingly.

Analysis: The credit had been earned on duty-paid inputs, but the assessee was later unable to cross-utilise it for the intended liability because of the applicable credit scheme. Following the earlier tribunal view and the principle that unutilised credit should not be denied where the assessee cannot use it for reasons beyond its control, the credit was held to be available for adjustment against the duty liability actually discharged through PLA.

Conclusion: The assessee was entitled to adjust the unutilised credit towards AED (GSI), and the authorities were required to permit recasting of RG23A Part II and PLA.

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