Modvat credit remains admissible when duty documents follow inputs later and no limitation bars delayed availment.

Rule 57G(2) permitted Modvat credit where inputs were received before the duty-paying documents, provided the documents were later obtained and the required RG 23A entries were made. The inputs were not required to accompany the documents at the time of receipt in the factory. Where the assessee explained that the goods were kept separately pending receipt of the documents and that explanation was not controverted, credit could not be denied merely because it was taken later. In the absence of any prescribed limitation period under the rule, delay in availment by itself did not defeat credit once the substantive conditions were satisfied.

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Issues: Whether Modvat credit was admissible where the inputs had been received earlier but the duty paying documents were produced later, and whether any delay in taking credit barred availment in the absence of a prescribed limitation.

Analysis: Rule 57G(2), as applicable during the relevant period, permitted duty paying documents to follow the inputs; the inputs were not required to accompany the documents at the time of receipt in the factory. Credit could be taken after receipt of the documents and after making the necessary RG 23A entries. The explanation that the documents were received later and that the goods were kept separately pending such receipt was not controverted. The rule did not prescribe any specific limitation period for availment of credit, and the delay noticed by the lower authorities could not by itself defeat the claim when the documents were subsequently received and the substantive conditions were satisfied.

Conclusion: Modvat credit was admissible, and the denial of credit was unsustainable.

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