Vested Modvat credit rights cannot be taken away by a later amendment; refund on exports remains maintainable.

Amended Rule 57F(17) of the Central Excise Rules, 1944 could not be applied to deny refund of unutilised Modvat credit on goods exported under bond where the credit had already accrued under the earlier scheme. The right to utilise that credit was treated as a vested right arising when inputs were received and used in manufacture, and a later amendment in materially similar terms could not retrospectively extinguish that entitlement. The earlier interpretation preserving accrued rights remained applicable, and the refund claim was maintainable and had to be processed according to law.

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Issues: Whether the amended Rule 57F(17) of the Central Excise Rules, 1944 could be applied to deny refund of unutilised Modvat credit in respect of goods exported under bond before the amendment took effect.

Analysis: The credit had been earned under the then existing Modvat scheme when the inputs were received and used in manufacture, and the right to utilise that credit had crystallised as a vested right. The amendment in Rule 57F(17) was in substance identical to the earlier provision considered in the earlier decision, and could not be read as taking away rights that had already accrued. A subsequent claim could rely on the earlier interpretation of the same kind of provision, and a fresh challenge to validity was not necessary where the provision had already been construed to preserve vested rights. The distinction drawn from the limitation-type proviso considered in the later case did not assist the Revenue, because that proviso did not extinguish an accrued credit right.

Conclusion: The amended rule could not defeat the assessee's vested entitlement, and the refund claim was maintainable and had to be processed according to law.

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