Unutilised excise credit after rescission of exemption notification cannot be transferred without satisfying immediacy conditions

Unutilised RG-23 credit under Notification No. 201/79 could not be transferred after the notification was rescinded, because the exemption benefit ceased with withdrawal and was not treated as a subsisting right saved by Section 6 of the General Clauses Act, 1897. Rule 57H(3) of the Central Excise Rules, 1944 also did not assist, since transfer of credit was allowed only where the manufacturer had been availing the credit facility immediately before the dated acknowledgement of the declaration. As the earlier benefit had stopped long before the March 1987 declaration, the immediacy condition was not met, and the claimed transfer of credit was not permissible.

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Issues: Whether the unutilised balance of credit lying in the RG-23 account under Notification No. 201/79 could be transferred or utilised after rescission of the notification when Modvat was later extended to cement, and whether Section 6 of the General Clauses Act, 1897 or Rule 57H(3) of the Central Excise Rules, 1944 supported such transfer.

Analysis: The unutilised credit arose under an exemption notification that stood rescinded on 1-3-1986, and the benefit under that notification ceased with its withdrawal. Section 6 of the General Clauses Act, 1897 did not save the claimed credit, because the credit was not treated as a subsisting right capable of being carried forward after rescission in the manner claimed. Rule 57H(3) of the Central Excise Rules, 1944 permitted transfer only where the manufacturer had been availing the credit facility immediately before obtaining the dated acknowledgement of the declaration. Here, the appellants had ceased to avail the earlier benefit long before the relevant declaration in March 1987, so the statutory condition of immediacy was not satisfied.

Conclusion: The claimed transfer of unutilised credit was not permissible, and the appeal failed.

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