Modvat credit remains admissible on endorsed documents and curable invoice defects, while later credit restrictions do not operate retrospectively.

Modvat credit was held admissible on endorsed GP-1 documents issued before 31-3-1994 even though endorsement occurred later, because precedent supported continued admissibility after that date. An authentication defect in invoices was treated as a curable irregularity, so the matter was remanded for verification and credit was to follow if the defect had been rectified. The amendment to Rule 57G barring credit after six months was held not to apply retrospectively to credit already taken before its commencement, and the assessee was granted relief on that item.

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Issues: (i) Whether Modvat credit on endorsed GP-1 documents issued before 31-3-1994 but endorsed after that date was admissible. (ii) Whether Modvat credit could be denied merely because the invoices were not authenticated under the prescribed requirement, or whether the defect was rectifiable. (iii) Whether the amendment to Rule 57G barring availment of credit after six months from the date of issue of the document applied retrospectively to credit taken before its commencement.

Issue (i): Whether Modvat credit on endorsed GP-1 documents issued before 31-3-1994 but endorsed after that date was admissible.

Analysis: The credit was denied only on the ground of post-31-3-1994 endorsement. The applicable view already taken in precedent was that endorsed GP-1 documents continued to support admissible Modvat credit after that date.

Conclusion: The issue was decided in favour of the assessee and the credit of Rs. 20,439 was allowed.

Issue (ii): Whether Modvat credit could be denied merely because the invoices were not authenticated under the prescribed requirement, or whether the defect was rectifiable.

Analysis: The defect in authentication was treated as a curable irregularity. Since the assessee stated that the defect had been rectified, verification by the original authority was considered necessary before granting relief.

Conclusion: The matter was remanded for verification, and the credit was to be allowed if the discrepancy stood rectified.

Issue (iii): Whether the amendment to Rule 57G barring availment of credit after six months from the date of issue of the document applied retrospectively to credit taken before its commencement.

Analysis: The relevant credit had been taken long before the amendment came into force. In the absence of retrospective language, the amended restriction could not govern past availment of credit.

Conclusion: The issue was decided in favour of the assessee and the credit of Rs. 1,789 was allowed.

Final Conclusion: The assessee succeeded on the substantive credit claims except that one item was sent back for factual verification, and the remaining reliefs were granted on the basis of admissibility of Modvat credit and the non-retrospective operation of the amendment.

Ratio Decidendi: An amendment restricting Modvat credit does not operate retrospectively in the absence of express legislative intent, and a curable procedural defect in supporting documents may warrant verification rather than outright denial of credit.

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