Modvat credit after six months remains allowable when goods are timely received and recorded in prescribed registers.

Modvat credit could not be denied merely because it was entered in Part II after six months from the invoice date, where the goods had been received within six months and recorded in the prescribed register. The Tribunal applied its earlier ruling that such delayed entry does not breach the Modvat rules when receipt and recordation are timely. A pending reference application, without any stay, did not weaken the precedential force of that ruling. On those facts, denial of credit was unsustainable and the Revenue's appeal failed.

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Issues: Whether Modvat credit could be denied merely because it was taken in Part II after six months from the date of the invoice, when the goods had been received within six months and entered in the prescribed records.

Analysis: The credit was claimed on goods received within the prescribed period and entered in the relevant register. The earlier Tribunal decision relied upon had already held that, in such circumstances, taking credit in Part II after six months is not hit by the Modvat rules. The Revenue did not dispute the applicability of that ratio on facts. The pendency of a reference application, without any stay, did not prevent reliance on the earlier decision.

Conclusion: The denial of Modvat credit was not sustainable, and the Revenue's appeal was rejected.

Ratio Decidendi: Where goods are received within six months of the invoice and recorded in the prescribed register, credit taken thereafter is not barred by the Modvat rules, and a pending reference application without stay does not dilute the binding effect of the prior Tribunal ruling.

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