Prospective withdrawal of proforma credit cannot reverse credit already validly availed before the notification took effect.

Withdrawal of the proforma credit facility for aluminium ingots did not authorise reversal of credit already validly availed under Rule 56-A. The High Court held that the notification withdrawing the benefit operated prospectively, and in the absence of an express retrospective provision or a specific rule requiring reversal, accumulated credit already earned could not be recalled for duty payment on finished goods. The later explanation to Rule 56-A was treated as consistent with that position, confirming that previously availed credit remained unaffected by the item's removal from the eligible list.

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Issues: Whether accumulated proforma credit already availed under Rule 56-A of the Central Excise Rules could be reversed or denied for duty payment on finished goods after the benefit of proforma credit for aluminium ingots was withdrawn by Notification No. 269/79 dated 4-10-79.

Analysis: The credit had been validly taken when the relevant facility was in force. The subsequent withdrawal of the facility operated prospectively and, in the absence of any express retrospective provision or a specific rule requiring reversal, did not authorise the Revenue to recall credit already availed. The later explanation inserted to Rule 56-A was treated as consistent with this position, confirming that previously earned credit could not be withdrawn merely because the item was later removed from the eligible list.

Conclusion: The accumulated proforma credit already availed could not be reversed, and the question was answered in favour of the assessee and against the Revenue.

Final Conclusion: The reference was answered by holding that the withdrawal of the proforma credit facility did not affect credit already taken before the notification came into force.

Ratio Decidendi: A withdrawal of a credit facility or exemption operates prospectively unless the statute or notification clearly provides otherwise, and credit already validly availed cannot be taken back in the absence of an express enabling provision.

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