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of <h1>Accumulated tax credit cannot lapse without statutory provisions, High Court affirms Tribunal decision.</h1> <h3>COMMR. OF C. EX. & CUS., SURAT-I Versus ANNAPURNA INDUSTRIES P. LTD.</h3> COMMR. OF C. EX. & CUS., SURAT-I Versus ANNAPURNA INDUSTRIES P. LTD. - 2010 (255) E.L.T. 197 (Guj.) Issues:1. Whether the Tribunal was justified in rejecting the appeal of revenue regarding the lapse of accumulated credit in the absence of specific legal provisionsRs.2. Whether Government Notifications and Circulars can be considered as legal provisions relating to the issue of accumulated credit lapseRs.Analysis:1. The respondent-assessee had accumulated deemed credit for which a refund claim was rejected by the adjudicating authority. The assessee argued that the accumulated credit did not lapse due to the introduction of the Compounded Levy Scheme in 1998, even though it could not be utilized as per the scheme's terms. The adjudicating authority maintained that since the order rejecting the refund claim was unchallenged, the credit lapsed. The Tribunal, however, found that there was no statutory provision indicating that the credit had lapsed, and in the absence of such provision, the accumulated credit shall not lapse.2. The revenue contended that the Compounded Levy Scheme did not permit carrying forward unutilized accumulated credit, implying that it had lapsed. The Tribunal, while upholding the Commissioner (Appeals) order, noted that the revenue failed to demonstrate any statutory provision showing that the deemed credit had lapsed. The Tribunal emphasized that without a legal provision explicitly stating the lapse of credit in the books, the accumulated credit shall not lapse.3. The appellant revenue could not establish any legal provision through Acts, Rules, Notifications, or Circulars indicating that the unutilized credit in the books should lapse due to the introduction of the Compounded Levy Scheme. As a result, the High Court found no legal infirmity in the Tribunal's decision and concluded that no substantial question of law arose from the order. Consequently, the appeal was dismissed.This detailed analysis of the judgment highlights the key issues of whether specific legal provisions were necessary for the lapse of accumulated credit and the relevance of Government Notifications and Circulars as legal provisions in such cases.
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