Tribunal allows post-withdrawal credit use, deems balance valid, setting aside impugned order.

The Tribunal allowed the appeal, holding that unutilized deemed credit under Notification No. 6/2002-CE(NT) could be utilized post-withdrawal under Notification No. 8/2003-C.E.(NT). The Tribunal emphasized that the accumulated deemed credit legally availed before the withdrawal could not be denied or reversed, as there was no provision for lapsing or reversal of the credit balance. Relying on previous judgments, the Tribunal concluded that the credit availed under the authority of the notification remains valid even after the notification's withdrawal, setting aside the impugned order.

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Issues:
Whether unutilized deemed credit under Notification No. 6/2002-CE(NT) can be utilized after withdrawal under Notification No. 8/2003-C.E.(NT).

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai involved the issue of whether unutilized deemed credit under Notification No. 6/2002-CE(NT) could be utilized for goods clearance post the withdrawal under Notification No. 8/2003-C.E.(NT). The appellant's counsel argued that this issue had been addressed in previous judgments, making it a settled matter. The counsel relied on several judgments, including S.V. Business Put. Ltd. case upheld by the Bombay High Court and the Supreme Court, Commissioner of C.Ex., Ahmedabad-ll Vs. Omkar Textile Mills Pvt. Ltd. case upheld by the Supreme Court, among others. The Revenue's representative reiterated the findings of the impugned order.

Upon careful consideration of the submissions, the Tribunal found that the accumulated deemed credit as of 31.3.2003 was availed under the authority of law before the withdrawal of Notification No. 6/2002-CE(NT). As there was no provision for lapsing or reversal of this credit balance, the legally availed credit could not be denied or reversed. Citing the judgments mentioned by the appellant's counsel, the Tribunal held that the credit availed under the authority of the notification cannot be denied if it remains in balance after the notification's recession. Relying on the precedent set by the previous judgments, the Tribunal set aside the impugned order and allowed the appeal.

This judgment, delivered on 06/12/2016 by Mr. Ramesh Nair and Mr. C.J. Mathew, provides clarity on the utilization of unutilized deemed credit under specific notifications, emphasizing the legal validity of such credits even after the withdrawal of relevant notifications.

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