Modvat credit on stale invoices is inadmissible; later duty debits do not cure the original time-barred availment.

Modvat credit taken on invoices more than six months old was inadmissible under Rule 57G, because the credit was availed well after the permissible period. The Tribunal held that the later return of goods and debit of duty under Rule 57F(1)(ii) did not cure the original defect, since the demand was confined to credit wrongly taken in 1995 on stale invoices. The denial of credit was therefore upheld, and the appeal failed.

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Issues: Whether Modvat credit could be availed on invoices issued more than six months earlier, and whether subsequent debits or clearances under Rule 57F(1)(ii) affected the denial of such credit.

Analysis: The credit was taken on the strength of invoices dated 21-2-1995, but the credit was availed only on 1-11-1995, well beyond the six-month period applied under Rule 57G. The Tribunal accepted that, in view of the governing law, credit could not be taken after expiry of that period. It also held that the appellants' subsequent return of goods and debit of duty under Rule 57F(1)(ii) in 1997 did not alter the position, because the show cause notice was confined to denial of credit wrongly taken in 1995 on stale invoices.

Conclusion: The denial of Modvat credit was upheld and the appeal failed.

Ratio Decidendi: Where Modvat credit is availed beyond the permissible time limit, the credit is inadmissible, and later transactions or debits do not cure the original irregular availment unless they are relevant to the very demand raised.

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