Retrospective Modvat amendment capped credit at 10%; excess recredit and separate notice challenge failed.

Retrospective amendment of the Modvat notification reduced admissible credit on the relevant inputs to 10% from the original date, so credit beyond that limit was not available. Where the assessee had already reversed the excess credit in compliance with departmental direction, without protest, it could not later object to the enforceability of that direction or insist on a separate show cause notice before denial of the excess credit. The additional objection regarding the absence of valid duty paying documents also remained unanswered on the record. The stated conclusion was that recredit above the amended limit was not permissible and the procedural challenge failed.

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Issues: Whether the assessee was entitled to take recredit of Modvat credit in excess of the amended 10% limit, and whether denial of the credit was vitiated for want of a separate show cause notice.

Analysis: The original notification allowing 15% credit stood amended retrospectively, reducing the maximum admissible credit on the relevant inputs to 10% with effect from the original date. The assessee had already reversed the excess credit in compliance with the Department's direction without protest and later restored the same amount on its own. In these circumstances, the assessee could not dispute the enforceability of the Department's direction or contend that a further notice was necessary. The objection based on absence of valid duty paying documents also remained unanswered in the proceedings.

Conclusion: The assessee was not entitled to credit beyond 10%, and the challenge based on want of a separate show cause notice failed.

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