Modvat credit cannot be denied by reading an unstated time limit into an exemption notification.

Modvat credit under Notification No. 204/92-Cus. could not be denied on the basis of a six-month import condition that the notification did not prescribe. The tribunal treated the facility to import raw materials against exports as an enabling benefit, not a mandatory prerequisite, and held that no condition could be implied into the notification by the Revenue. As admissibility of the credit was otherwise accepted, the denial was unsustainable and the credit remained available to the assessee.

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Issues: Whether Modvat credit could be denied on goods cleared under Notification No. 204/92-Cus. on the ground that the importer did not import raw materials against exports within six months.

Analysis: The notification was found to contain no condition requiring import of raw materials within six months. The facility to import raw materials against exports was treated as an enabling benefit, not a mandatory requirement, and the Revenue was unable to point out any such condition in the notification. Since the admissibility of Modvat credit under the notification was otherwise accepted, denial of credit on that ground was unsustainable.

Conclusion: The denial of Modvat credit under Notification No. 204/92-Cus. was unjustified and the credit was admissible to the assessee.

Ratio Decidendi: Where a notification grants credit or exemption without prescribing a time-bound condition for availing an ancillary import facility, such credit cannot be denied by reading into the notification a condition not expressly provided.

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