Rescinded exemption notification cannot support transfer of credit, while consequential cash refund may still merit fresh examination.

Credit linked to Notification No. 201/79 could not be transferred to RG 23A Part II under Rule 57H(3)(b) once the notification had been rescinded, because the concession could not be used under a notification that had ceased to operate. The article notes that the Tribunal rejected the claimed transfer of credit on that basis. It also states that the notification functioned as an exemption notification and contained no express cash-refund mechanism, but consequential relief arising from earlier denial of benefit was left for fresh examination by the original authority in light of the cited precedent.

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Issues: (i) Whether credit linked to Notification No. 201/79 could be transferred to RG 23A Part II under Rule 57H(3)(b) after the notification stood rescinded. (ii) Whether, if such transfer was unavailable, the assessee could be considered for refund in cash.

Issue (i): Whether credit linked to Notification No. 201/79 could be transferred to RG 23A Part II under Rule 57H(3)(b) after the notification stood rescinded.

Analysis: The credit was treated as having been notionally restored to the position prevailing when the inputs were received, so that the benefit under the notification was available up to the date of rescission. However, by the time the credit was sought to be used, the notification had already ceased to operate. The scheme did not permit the credit to be utilized under the rescinded notification, and the Tribunal held that the concession under Rule 57H(3)(b) was not available in the manner claimed.

Conclusion: The claim for transfer of credit under Rule 57H(3)(b) was rejected, in favour of Revenue.

Issue (ii): Whether, if such transfer was unavailable, the assessee could be considered for refund in cash.

Analysis: The notification was treated as an exemption notification and did not itself contain a provision for cash refund of the credit. At the same time, the assessee had been denied the benefit earlier on account of the departmental action, and the question of consequential relief required reconsideration on the factual and legal position. The matter was therefore directed to be examined afresh by the original authority for possible cash refund in the light of the cited precedent.

Conclusion: The question of cash refund was not finally decided and was remitted for fresh consideration.

Final Conclusion: The departmental challenge succeeded on the availability of transfer of credit under Rule 57H(3)(b), but the assessee's claim for consequential cash refund was kept open for reconsideration by the original authority.

Ratio Decidendi: A credit claim cannot be carried forward under a rescinded notification merely by notional restoration, but where earlier denial of benefit is found to have occurred, consequential relief may require fresh examination within the limits of the governing notification and procedure.

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