1999 (1) TMI 34 - SUPREME COURT

Validity and application of the Scheme, as modified by introduction to Rule 57F [read as 57F(4A)] of the Central Excise Rules, 1944, under which credit which was lying unutilised on 16th March, 1995 with the manufacturers, stood lapsed in the manner set out therein

Held that:- If on the inputs the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto then the tax on these goods gets adjusted which are finished subsequently. Thus a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Therefore, it becomes clear that Section 37 of the Act does not enable the authorities concerned to make a rule which is impugned herein and, therefore, we may have no hesitation to hold that the rule cannot be applied to the goods manufactured prior to 16-3-1995 on which duty had been paid and credit facility thereto has been availed of for the purpose of manufacture of further goods.

Allow the petitions filed by the assessees and declare that the said rule cannot be applied except in the manner indicated by us .