Accrued excise credit rights survive rescission of notifications where vested entitlement under the scheme has already arisen.

Accumulated money credit in RG 23B was treated as a vested, accrued entitlement earned under the operative notification scheme. Section 38A of the Central Excise Act, 1944 was applied to preserve rights already acquired or accrued despite amendment, repeal or rescission of the notification, unless a contrary intention appears. On that basis, the later rescission of the scheme did not defeat utilisation of the credit for payment of duty, and the restriction and recovery action were unsustainable.

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Issues: Whether the petitioners were entitled to utilise the accumulated money credit lying in RG 23B despite rescission of the notifications under which the credit had accrued.

Analysis: The accumulated money credit was treated as a vested and accrued right earned under the operative notification scheme. Section 38A of the Central Excise Act, 1944 was relied upon for the principle that amendment, repeal or rescission of a notification does not affect rights already acquired or accrued unless a contrary intention appears. The earlier decision recognising the manufacturers' entitlement to use the credit had already been affirmed by the dismissal of the related Special Leave Petitions, and the same legal position was applied here. The objection that the scheme had later been rescinded could not defeat the accrued entitlement to utilise the credit for payment of duty.

Conclusion: The petitioners were entitled to utilise the accumulated money credit lying in their RG 23B registers, and the impugned restriction and recovery action were unsustainable.

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