Prospective operation of Cenvat credit restriction preserves pre-existing earned credit for later duty payment.

A notification restricting utilisation of Cenvat credit was applied prospectively and could not curtail credit lawfully accumulated before its commencement. Credit earned before 18-8-2000 remained available for duty payment on clearances made after that date, because the notification did not clearly indicate an intention to take away accrued entitlement. The assessees' use of the pre-existing credit was therefore valid, and the Revenue's challenge failed.

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Issues: Whether Notification No. 48/2000-C.E. (N.T.) dated 18-8-2000 could be applied so as to restrict utilisation of Cenvat credit already earned prior to its commencement.

Analysis: The credit had been accumulated before the notification came into force. The restriction introduced by the notification was therefore treated as operating only prospectively, and not so as to take away the assessees' already accrued entitlement to use the credit for duty payment on clearances made after the notification date.

Conclusion: The restriction could not be applied to credit already earned before 18-8-2000, and the utilisation of such credit was held to be lawful and valid.

Final Conclusion: The Revenue appeals failed because the notification was confined to future operation and did not invalidate the assessees' prior earned Cenvat credit.

Ratio Decidendi: A notification restricting utilisation of Cenvat credit is prospective unless it clearly indicates a contrary intention, and it cannot curtail credit lawfully accumulated before its commencement.

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