Accrued tax credit survives rescission, but refund and alternate adjustment are barred where the incentive scheme limits utilisation.

Accrued credit under Notification No. 45/89 was treated as a vested benefit once the manufacturer had acted on the incentive scheme and altered its process, so rescission of the notification did not retrospectively extinguish credit already earned. However, the scheme limited utilisation of the credit to adjustment against excise duty on the specified final product and expressly barred refund or use against other goods. When excise duty on the final product was later abolished, the Court declined to create a new adjustment mechanism or read down the refund prohibition, leaving the scheme's utilisation limits intact.

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Issues: (i) Whether the credit already accrued under Notification No. 45/89 lapsed upon rescission of the notification. (ii) Whether, after abolition of excise duty on the final product, the petitioners were entitled to any alternate mode of adjustment, refund, or reading down of the prohibition on refund.

Issue (i): Whether the credit already accrued under Notification No. 45/89 lapsed upon rescission of the notification.

Analysis: The credit facility granted under the notification was treated as an accrued benefit once the petitioners had acted upon the scheme and altered their manufacturing process accordingly. Rescission of the notification could not be read as taking away credit already earned, since that would amount to giving retrospective effect to an administrative act. The earlier judicial determination on the same scheme, applying promissory estoppel, was followed.

Conclusion: The accrued credit did not lapse and remained available to the petitioners.

Issue (ii): Whether, after abolition of excise duty on the final product, the petitioners were entitled to any alternate mode of adjustment, refund, or reading down of the prohibition on refund.

Analysis: The scheme itself limited utilisation of the credit to adjustment against excise duty on the specified final product and expressly negatived refund or use against any other excisable goods. The concession was a policy-linked incentive, accepted by the manufacturer with full knowledge of its conditions. Once the duty on the final product was withdrawn, the mode of utilisation became inapplicable, but the Court held that this did not justify creating a new mode of adjustment or refund through judicial intervention. The prohibition on refund was not struck down or read down.

Conclusion: No alternate mode of adjustment or refund was available, and no further relief was granted on that basis.

Final Conclusion: The Court protected the accrued credit from lapse, but upheld the limits built into the incentive scheme and declined to substitute a different utilisation mechanism after the duty-free regime came into force.

Ratio Decidendi: A credit incentive, once validly accrued and acted upon, cannot be retrospectively taken away by rescission of the granting notification, but where the scheme expressly restricts utilisation to a specified mode and excludes refund or other adjustment, the Court will not rewrite the policy to create an alternative mode of enjoyment.

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