Modvat credit limitation runs from the out-of-charge date under customs clearance, making delayed credit claims time-barred.

Modvat credit taken more than six months after the relevant customs clearance date was held to be time-barred, because the period had to be reckoned from the order permitting clearance under Section 47 of the Customs Act, 1962, i.e. the out-of-charge date. On that basis, credit claimed beyond the prescribed period was not admissible, and the appeal failed.

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Issues: Whether Modvat credit taken beyond six months from the date of the bill of entry was barred by limitation, the relevant date being the order permitting clearance under Section 47 of the Customs Act, 1962.

Analysis: The credit had been taken after more than six months from the date of the bills of entry. The date relevant for reckoning the period was the date of the order under Section 47 of the Customs Act, 1962, i.e. the out-of-charge date, and the delay in availing credit was accepted.

Conclusion: The claim for Modvat credit was time-barred and the appeal failed.

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