Modvat credit entitlement turned on invoice date relevance and whether later exclusion could defeat an accrued right.

Modvat credit entitlement depended on whether the invoice date governed availment and whether the amendment excluding the input could defeat an asserted vested right. Rule 57G(5) was noted as allowing credit to be taken within six months from the date of issue of the Modvat document, making the document date legally relevant to entitlement. The appellate authority was said not to have examined this contention properly, so the matter required fresh determination in accordance with law and natural justice. The impugned order was set aside and the issue remanded for reconsideration.

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Issues: Whether the admissibility of Modvat credit on inputs was to be determined with reference to the date of issue of the invoice and whether the amendment excluding the input could operate to defeat a claimed vested right.

Analysis: The dispute turned on the relevance of the invoice date for availment of Modvat credit under the governing rules, particularly the contention that the right to credit accrued when the Modvat document was issued. The appellate authority had not examined this plea in its proper perspective. Rule 57G(5) was also relevant, as it provided a six-month period for availing input credit reckoned from the date of issue of the Modvat document, indicating that the invoice date could bear on the legal entitlement. The matter therefore required a fresh determination of the issue in accordance with law and the principles of natural justice.

Conclusion: The appeal was allowed and the impugned order was set aside, with the matter remanded for reconsideration of the Modvat credit entitlement issue.

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