HIGH COURT OF HIMACHAL PRADESH AT SHIMLA Ex.Ref. No. : 10 of 2000 Decided on: 5.9.2008. Commissioner, Central Excise ……… Petitioner. Versus M/s Himachal Aluminium (P) Ltd. and another ………Respondents. Coram: The Hon’ble Mr.Justice Deepak Gupta, Judge. The Hon’ble Mr.Justice V.K. Ahuja, Judge. Whether approved for reporting? No. For the appellant: Mr.Sandeep Sharma, Assistant Solicitor General of India. For the respondents: None. Deepak Gupta, J. (Oral): This Excise Reference has been admitted on the following question of law: “Whether party can utilize the accumulated proforma credit to pay duty on finished goods when proforma credit facility itself was withdrawn in respect of Aluminium Ingots vide Notification No.269/79, dated 4.10.79?” The brief facts necessary for the decision of the case are that the assessee is a manufacturer of aluminium iron rods. These aluminium rods were manufactured out of aluminium ingots. The assessee was availing proforma credit under Rule 56-A of the Central Excise Rules, as it existed at the relevant time, on the aluminium ingots. ___________ 1.Whether reporters of Local papers may be allowed to see the judgment? Yes. - 2 - With effect from 4th October, 1979, the benefit of proforma credit was withdrawn in respect of aluminium ingots, vide Notification No.269/79, dated 4th October, 1979. The Department directed the assessee to reverse the credit which it had already taken in respect of the stock of aluminium ingots, which were lying in stock as on 4.10.1979. Thereafter, a show cause notice was issued to the party. The assessee contended that under Rule 56-A of the aforesaid Rules, there was no provision for reversal of the credit, which it had already obtained. The contention of the party was rejected by the Assessing Officer as well as the Commissioner Excise. However, the Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT), vide its order, dated 18.6.1998, after considering the provisions of Rule 56-A of the Central Excise Rules, came to the conclusion that it was the Government which had removed the aluminium ingots from the items for which proforma credit could be availed w.e.f. 4th October, 1979. The credit which had already been availed off before that date could not be recalled without there being a specific provision in this behalf. Rule 56-A, as it stood at the relevant time, did not contain any provision which would indicate that the revenue had the right to ask the assessee to repay the amount of credit which had already been claimed under the earlier notification. It is well settled law that all notifications which may affect the rights of the parties are treated to be prospective in nature unless the notification itself clearly indicates that it will have retrospective effect. This is not so in the present case. We may also add that an explanation to Rule 56-A of the aforesaid Rules was added in the year 1983 wherein also it was clearly stated that if by way of amendment, any item for which earlier credit was available, was removed from the list, then the benefit already availed of by the assessee could not be - 3 - withdrawn. True it is that this explanation came at a later stage, but this explanation is in consonance with the well settled principles of law. In view of the above discussion, we answer the question referred to us in favour of the assessee and against the revenue. The petition is disposed of accordingly. (Deepak Gupta), Judge. September 5, 2008. (V.K. Ahuja), (TILAK) Judge.