CENVAT credit utilisation for excise duty upheld where prior additional duty credit was lawfully used and no substantial question arose.

Rule 3(7)(b) of the CENVAT Credit Rules, 2004 permitted utilisation of credit of additional duty of excise paid on or after 1 April 2000 towards payment of excise duty, and the court found the assessee's use of such credit for basic excise duty and special excise duty to be correct. The same controversy had already been decided in the assessee's favour in earlier proceedings, and the departmental challenge had previously failed because no substantial question of law arose. Applying that position, the court declined to interfere and upheld the Tribunal's view that the credit was properly utilised. No substantial question of law arose for consideration under section 35G.

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Issues: Whether the assessee was entitled to utilise credit of additional duty of excise (goods of special importance) accrued prior to 1 April 2003 towards payment of basic excise duty and special excise duty, and whether any substantial question of law arose for interference under section 35G.

Analysis: The appeal turned on the effect of rule 3(7)(b) of the CENVAT Credit Rules, 2004 and its explanation, under which credit of additional duty of excise paid on or after 1 April 2000 could be utilised towards payment of excise duty. The Court noted that the same controversy had already been decided in the assessee's favour in earlier proceedings, and that the departmental challenge had been rejected on the ground that no substantial question of law arose. In the present case, the Tribunal had again held that the assessee had correctly used the credit for payment of basic excise duty and special excise duty, and the Court found no reason to take a different view.

Conclusion: No substantial question of law arose. The credit utilisation was upheld, and the appeal failed.

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