Retrospective credit restriction barred use of pre-2000 additional excise duty credit for basic excise duty payment.

Credit of additional excise duty availed before 1-4-2000 could not be utilised towards payment of basic excise duty after the retrospective amendment to the credit rule. The amendment, made on 10-9-2004 with retrospective effect, expressly barred use of such pre-1-4-2000 credit for basic excise duty, and the admitted utilisation in 2003 was therefore impermissible. The CESTAT held the amended restriction to be effective against the assessee and upheld the Revenue's position.

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Issues: Whether credit of additional excise duty availed before 1-4-2000 could be utilised towards payment of basic excise duty after the retrospective amendment.

Analysis: The credit had been taken in respect of additional excise duty on inputs before 1-4-2000 and was used towards payment of basic excise duty on 1-4-2003. The relevant rule was retrospectively amended on 10-9-2004 to provide that such credit, when taken before 1-4-2000, could not be utilised for payment of basic excise duty. In view of the retrospective amendment and the admitted facts, the appellant's utilisation of credit was not permissible.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Final Conclusion: The appeal failed because the retrospective amendment barred the utilisation of the disputed credit for payment of basic excise duty.

Ratio Decidendi: A retrospective amendment may validly restrict the utilisation of previously availed credit, and such credit cannot be used contrary to the amended rule.

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