Accrued Cenvat credit cannot lapse without express statutory forfeiture language; existing credit remained available for carry forward.

Accrued Cenvat credit could be carried forward and utilised because the notification and the Cenvat Credit Rules did not expressly provide for forfeiture or lapse of existing credit. The Tribunal held that a vested credit right cannot be extinguished by implication; clear statutory language is required before existing credit can be denied. It found no express provision in Notification No. 10/2002-C.E. or in Rules 3(2) and 3(4) authorising forfeiture, and relied on the principle affirmed in Rasoi Ltd. that credit rights do not disappear merely because a later scheme applies.

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Issues: Whether the assessee was entitled to carry forward and utilise the unutilised Cenvat credit lying in its account when the notification and the Cenvat Credit Rules did not expressly provide for forfeiture of such credit.

Analysis: The Tribunal held that a right already accrued does not get extinguished unless there is a specific statutory mandate to that effect. It found no express provision in Notification No. 10/2002-C.E. dated 01.03.2002 denying carry forward of the existing credit, and noted that neither Rule 3(2) nor Rule 3(4) of the Cenvat Credit Rules, 2002 supplied any clear basis for forfeiture. The Tribunal also relied on the principle affirmed in the Calcutta High Court decision in Rasoi Ltd., as upheld by the Supreme Court, that the right to credit does not vanish by mere operation of a later scheme absent express legislative language.

Conclusion: The assessee was entitled to carry forward the unutilised Cenvat credit, and the demand forfeiting that credit was not sustainable.

Final Conclusion: The appeal succeeded to the extent of the assessee's claim to preserve and use the unutilised credit under the notification regime.

Ratio Decidendi: An accrued credit right cannot be taken away or treated as lapsed in the absence of an express statutory provision or clear notification language authorising forfeiture.

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