Deemed credit does not lapse by implication on introduction of a new levy scheme without express statutory support.

Accumulated deemed credit recorded in the assessee's books did not lapse on introduction of the Compounded Levy Scheme because no provision in the Act, Rules, notification or circular expressly provided for such extinguishment. The Tribunal's view was upheld on the basis that the Revenue could not identify any legal authority supporting automatic lapse of unutilised credit, and the High Court found no legal infirmity in that reasoning. As no substantial question of law arose, the Revenue's challenge failed.

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Issues: Whether accumulated deemed credit lying in the books of account lapsed on introduction of the Compounded Levy Scheme, in the absence of any statutory provision, notification, rule or circular expressly providing for such lapse.

Analysis: The Tribunal had found that the Revenue could not point to any legal provision stating that the deemed credit standing in the assessee's books had lapsed. The High Court noted that even before it, no provision of law, whether in the Act, Rules, Notification or Circular, was shown to support the contention that unutilized accumulated credit automatically stood extinguished on introduction of the Compounded Levy Scheme. In the absence of any legal infirmity in the Tribunal's view, no substantial question of law arose.

Conclusion: The accumulated deemed credit did not lapse merely because the Compounded Levy Scheme was introduced, and the Revenue's challenge failed.

Ratio Decidendi: In the absence of an express statutory provision, accumulated credit in the books does not lapse by implication on introduction of a new levy scheme.

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