Accrued credit rights survive later scheme withdrawal when timely transfer was sought and departmental refusal blocked utilisation.

Unutilised proforma credit of auxiliary duty and regulatory duty, when lawfully earned and timely applied for, could be transferred to the Personal Ledger Account for utilisation if the department's refusal alone prevented use. The later withdrawal of the relevant credit facility did not defeat an accrued benefit that should have been allowed under the scheme then in force. The article treats departmental inaction as decisive: credit admissible at the material time remains available for utilisation, and a subsequent change in the scheme cannot be used to deny transfer or bar relief merely because cash refund was also unavailable.

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Issues: Whether unutilised proforma credit of auxiliary duty and regulatory duty, applied for in time but not permitted by the department before the relevant credit scheme changes, could still be transferred to the Personal Ledger Account and utilised notwithstanding the subsequent withdrawal of the facility.

Analysis: The credit provisions then in force permitted utilisation of the unutilised balance of auxiliary duty and regulatory duty credit towards payment of duty on finished goods. The respondents had made timely applications for transfer of the credit, but the department withheld permission and later relied on subsequent withdrawal of the relevant facility and the bar against cash refund. The decisive consideration was that the credit was admissible when earned and could have been utilised at the material time; the inability to use it resulted from departmental inaction. The later change in the scheme could not be used to defeat a benefit that had already accrued and should have been allowed. The credit was therefore to be treated as available at the material time, and the refusal to permit transfer on the ground of later developments was not sustainable.

Conclusion: The transfer of the unutilised credit to the Personal Ledger Account was rightly allowed, and the Revenue's objections failed.

Final Conclusion: The appeals were dismissed and the orders allowing transfer and utilisation of the credit were upheld.

Ratio Decidendi: Where credit is legally admissible and timely sought, departmental refusal to grant permission cannot be relied upon later to deny utilisation merely because the relevant scheme or facility was subsequently withdrawn; the credit is treated as available at the material time.

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