Crystallised Modvat credit cannot be reversed merely because the final-product exemption or facility is later withdrawn.

Modvat credit on inputs was treated as having accrued when the inputs were received and the entitlement was governed by the notification then in force. Withdrawal of the Modvat facility for the final product did not operate retrospectively to extinguish a right that had already crystallised, and there was no specific provision permitting recovery of credit already validly taken and utilised merely because the scheme was later withdrawn. The previously availed and utilised credit therefore could not be reversed on that ground, and the revenue challenge failed.

---

---

Issues: Whether Modvat credit already accrued and utilised in respect of inputs could be reversed after withdrawal of the Modvat facility for the final product.

Analysis: The credit under the Modvat scheme accrued when the inputs were received and the entitlement became governed by the notification then in force. The withdrawal of the exemption or Modvat facility did not, by itself, operate retrospectively to take away a right that had already crystallised. The Tribunal followed its earlier view that there was no specific provision for recovering credit already validly taken and utilised merely because the scheme was later withdrawn.

Conclusion: The credit already taken and utilised could not be reversed on the ground of subsequent withdrawal of Modvat benefit, and the revenue appeal failed.

---