Accumulated excise credit survives rescission, but utilisation remains subject to the original notification's ceiling and cash payment balance.

Accumulated credit under a concessionary excise notification survives rescission and remains available for utilisation in the running credit account, because neither the rules nor the notification provided for automatic lapse of already earned credit. However, that credit must still be used subject to the conditions attached to the notification under which it was earned. The ceiling in condition No. 3 continued to govern utilisation for each clearance, so the balance duty had to be paid in cash and the scheme could not be used to make double debits or bypass the prescribed cap.

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Issues: (i) Whether the writ petition was premature and liable to be dismissed on that ground; (ii) Whether accumulated credit earned under Notification No. 27/87 lapsed on rescission of that notification and could not be utilised after 25-8-1989; (iii) Whether the accumulated credit under Notification No. 27/87 could be utilised without regard to the ceiling in condition No. 3 so as to permit double debits and avoid payment of the balance duty in cash.

Issue (i): Whether the writ petition was premature and liable to be dismissed on that ground.

Analysis: The objection of prematurity was not pursued before the original writ court and the respondents had also challenged the vires of the rescinding notification, a contention not available before the departmental authorities. On those facts, the extraordinary jurisdiction could be invoked and the writ could not be rejected as premature in appeal.

Conclusion: The issue was decided in favour of the respondents and against the appellants.

Issue (ii): Whether accumulated credit earned under Notification No. 27/87 lapsed on rescission of that notification and could not be utilised after 25-8-1989.

Analysis: The credit scheme under Rule 57K and the connected statutory forms contemplated a continuing running credit account. Nothing in the rules or the notification provided that credit already earned would be wiped out on rescission. The credit already accumulated remained available for utilisation, subject to the scheme under which it was earned.

Conclusion: The issue was decided in favour of the respondents and against the appellants.

Issue (iii): Whether the accumulated credit under Notification No. 27/87 could be utilised without regard to the ceiling in condition No. 3 so as to permit double debits and avoid payment of the balance duty in cash.

Analysis: The credit earned under Notification No. 27/87 was expressly subject to condition No. 3, which capped utilisation for each clearance at Rs. 1,000 per tonne and required the balance to be paid in cash. The later notification did not create a separate independent account or authorise two debits against one clearance. The accumulated credit could be enlarged by further credits under the later notification, but utilisation remained governed by the ceiling attached to each notification.

Conclusion: The issue was decided against the respondents and in favour of the appellants.

Final Conclusion: The appeal succeeded only to the extent that the respondents were not entitled to avoid payment of the balance excise duty in cash or to make double debits against the running credit account, while their entitlement to utilise the accumulated credit itself was preserved subject to the prescribed ceiling.

Ratio Decidendi: Accumulated credit under a concessionary excise notification survives rescission, but its utilisation remains bound by the conditions attached to the notification under which it was earned, and a single running credit account cannot be used to circumvent the statutory ceiling by making double debits for one clearance.

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