Modvat credit limitation on furnace oil runs from the invoice date; Part I entries and departmental permission do not extend time.

Modvat credit on furnace oil was held to be governed by the six-month limit in Rule 57G(5), calculated from the date of the duty-paying invoices. Credit taken after that period was treated as time-barred. The RG 23A Part I entry was only a record of receipt of inputs and did not amount to availment of credit, which required a Part II entry. Departmental permission did not create a statutory embargo or defer the commencement of limitation. The precedents relied on were distinguished on facts and found inapplicable, and the time-bar objection was sustained.

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Issues: Whether Modvat credit on furnace oil was time-barred when taken after six months from the dates of the duty-paying invoices, and whether the limitation period could instead be computed from the date of departmental permission or from the RG 23A Part I entry.

Analysis: Rule 57G(5) prescribed a six-month time limit for availment of input duty credit, computable from the date of the duty-paying document. The relevant invoices were dated between 2 April 1999 and 17 July 1999, while the credit was taken only on 21 January 2000. The entry in RG 23A Part I recorded receipt of the input and did not amount to availment of credit, which required a Part II entry. The claimed departmental permission did not create any statutory embargo on credit-taking, and therefore did not shift the starting point of limitation. The cited precedents were distinguished on facts and found inapplicable.

Conclusion: The credit was time-barred and the contention that limitation should run from the date of permission or from the RG 23A Part I entry was rejected.

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