Retrospective application of Modvat credit time-limit rejected where credit was taken before the Rule 57G amendment.

Amended time-limits under Rule 57G could not be applied retrospectively to deny Modvat credit already taken before the six-month restriction came into force on 29-6-1995. The inputs had been received in 1993 and the credit was taken in February 1995, so the later amendment could not invalidate an accrued credit claim. The analysis also noted earlier support for the view that credit taken before the amendment could not be refused merely because time had elapsed after the duty-paying documents were issued. Interim relief was therefore granted in favour of the claimant.

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Issues: Whether the amended time-limit under Rule 57G of the Central Excise Rules could be applied to deny Modvat credit on inputs received before the amendment.

Analysis: The inputs were received in 1993 and credit was taken in February 1995, while the six-month restriction was introduced only with effect from 29-6-1995. The amended provision could not, therefore, be invoked to disallow credit already taken before its commencement. The order also noted that the claim was prima facie supported by the earlier view that credit taken before the amendment could not be denied merely because several years had elapsed after the duty-paying documents were issued.

Conclusion: The amended time-limit was held inapplicable to the appellant's credit claim, and interim relief was granted in favour of the appellant.

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