Accrued credit under a rescinded notification remained usable because rescission did not retrospectively extinguish earned entitlement.

Credit validly earned under Rule 57K and standing in the assessee's RG 23 Part-II account was not retrospectively extinguished by rescission of the notification under which it arose. The distinction between earning credit and utilising credit was material, and a rescinding notification did not, without express words or necessary implication, take away an accrued right to use already earned credit. The credit therefore remained available for utilisation after rescission, and denial of such use was unsustainable.

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Issues: Whether credit lawfully earned under Notification No. 192/87 could be utilised after its rescission by Notification No. 39/89, or whether the rescission automatically abrogated the unutilised credit.

Analysis: The credit had been validly earned under Rule 57K and was standing in the assessee's RG 23 Part-II account when the rescinding notification came into force. The distinction between taking credit and utilising credit was material. A rescinding notification, by itself, did not expressly or by necessary implication extinguish credit already earned or prohibit its use. The right to utilise the credit had crystallised and could not be taken away retrospectively in the absence of clear statutory language.

Conclusion: The credit already earned remained available for utilisation after rescission, and the denial of such utilisation was not sustainable. The issue is decided in favour of the assessee.

Ratio Decidendi: Unless the rescinding instrument expressly or by necessary implication provides otherwise, rescission of a notification does not retrospectively extinguish an accrued right to utilise credit already lawfully earned under the governing scheme.

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