ORDER
S. Kalyanam, Member (J)
1. This appeal is directed against the order of the Collector of Central Excise (Appeals), Bangalore dated 14-9-1990 confirming the order of the Asstt. Collector of Central Excise, Bangalore dated 9-3-1990.
2. Shri Almeido, the Officer Incharge of Central Excises and Customs of the appellant company submitted that the appellants are manufacturing soaps and detergent falling under Chapter 34 and were availing credit under Rule 57K on rice bran oil at the rate of Rs. 640 per M.T in terms of Notification 192/87 dated 12-8-1987 and had a credit of Rs. 74,289.80 on rice bran oil in their RG 23-A Part-2 as on 25-8-1989. Notification 192/89 allowed a fixed credit in respect of the use of rice bran oil and also imposed a restriction that such credit earned should be utilised only in the next month. This notification was rescinded by Notification 39/89 dated 25-8-1989 and the Department rejected the appellant’s contention that credit earned earlier in terms of Notification 192/87 cannot be utilised after the issue of Notification 39/89 dated 25-8-1989 and assailed the correctness of this view. It was submitted that it is not disputed that the appellant had lawfully earned the credit under Notification 192/87 and the credit could not be utilised by virtue of the restriction placed on the said notification. Utilisation of credit is different from taking credit. The credit lawfully earned could be utilised unless such utilisation is either expressly or by necessary implication prohibited. Reliance was placed on the ratio of the Division Bench ruling of the Gujarat High Court reported in 1991 (52) E.L.T. 222 (Guj.) in the case of Dipak Vegetable Oil Industries Ltd. v. Union of India.
3. Heard Shri Gregory, the learned SDR.
4. We have considered the submissions made before us. The fact that the appellant in terms of the Notification 192/87 dated 12-8-1987 earned the credit on rice bran oil is admitted and is not disputed. The only question for consideration in the appeal is whether such credit standing to the credit of the appellant in their RG 23 Part-II as on 25-8-1989 would stand automatically abrogated by virtue of the rescinding Notification No. 39/89 dated 25-8-1989. As rightly contended by the learned representative of the appellant, utilisation of the credit is different from taking credit. In the impugned order the adjudicating authority has not stated the rescinding Notification 39/89 by its terms abrogated the credit already earned or prohibited its utilisation. The appellate authority in denying the utilisation of the credit by the appellant in the impugned order has observed as under:
“Notification 192/87 was issued under Rule 57K. This Notification fixes the rate at which the credit of duty is to be given for use of such inputs in the manufacture of final product. Notification 192/87 was rescinded by Notification 39/89 dated 25-8-1989. This was also issued under Rule 57K. Once Notification was rescinded it also rescinded the scheme under which it was given. Subsequent Notification issued is nothing provided regarding unutilised credit. Credit account will start afresh.”
The issue of a rescinding notification would not ipso facto abrogate or nullify the credit already earned nor its utilisation. The Division Bench of the Gujarat High Court dealing with similar issues and also the scope of Rule 57K of the Central Excises and Salt Act, 1944 has observed as under:
“While it is true that the right to get credit came into existence only on issuance of the aforesaid notification, on a correct interpretation of Rule 57N read with Rule 57K will have to be held the right to utilise the credit so earned did not come to an end the moment the said notifications were rescinded. In this context it is pertinent to note that only the aforesaid notifications have been rescinded and not Rule 57N which confers a right to utilise the credit already earned. A right conferred by a rule could not have been taken away by the Government by merely rescinding the notifications which had brought the said right into existence. The right which the manufacturer had got, no doubt on the issuance of said notification was a monetary right and once it got crystallised in terms of money, the same could not have been treated as having come to an end on the day on which the said notifications came to be rescinded. As a result of rescission of the said notifications on and from that date onwards, the manufacturer ceased to have the benefit of earning credit of money; but the Government could not have intended to deprive the manufacturer of his right to utilise the credit already earned because that would have been unfair to the manufacturers. The manufacturers, relying upon the rules and the notifications, used the notified minor oils in the manufacture of Vanaspati or soap thus suffering a disadvantage because of the low process yield of such minor oils, but hoping to get credit of money by way of rebate and further right to utilise that credit for payment of excise duty on the manufacture of Vanaspati and soap. We are, therefore, of the opinion that even after the aforesaid notifications came to be rescinded with effect from 25-8-1989 the credit of money which was earned by the manufacturers of Vanaspati and soap could be utilised by them in terms of the rules and the notifications for payment of excise duty on vanaspati and soap manufactured by them after 25-8-1989.”
The following observations of the Supreme Court in the case of Shri Vijayalakshmi Rice Mills v. State of M.P., reported in AIR 1976 SC 1471 are also apposite and relevant:
“It is well recognised rule of interpretation that in the absence of express words or appropriate language from which retrospectivity may be inferred, a notification takes effect from the date it is issued and not from any prior date. The principle is also well settled that statutes should not be construed so as to create new disabilities or obligations or impose new duties in respect of transactions which were complete at the time the Amending Act came into force..”
Reliance can also be made usefully to the observations of the Supreme Court in the case of Govinddas v. Income-tax Officer, reported in AIR 1977 SC 552, extracted as under:
“10. … Now it is a well settled rule of interpretation hallowed by time and sanctified by judicial decisions that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure….”
5. It would thus be seen that the right acquired by the appellant as a result of abolition of a statutory provision cannot be whittled down, nullified, abrogated or taken away retrospectively unless a statutory provision so provided for it either expressly or with necessary implications.
6. Therefore, for the reasons set out above and following the ratio of the rulings cited supra we hold that the impugned order is not sustainable in law and in this view the same is set aside and the appeal is allowed.