Modvat credit limitation on imported inputs runs from clearance date where Customs detention is not proved.

Imported-input Modvat credit was held time-barred because, where the goods were not shown to have been detained by Customs after assessment and duty payment, the six-month limit under Rule 57G(5) ran from the clearance date and not from the Bill of Entry. The Tribunal also held that documents not authorised under Rule 57G(2) could not support the credit claim or extend limitation. On those facts, the earlier contrary ruling was distinguished, and the credit was treated as wrongly allowed.

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Issues: Whether Modvat credit on imported inputs was barred by limitation under Rule 57G(5) of the Central Excise Rules, 1994, and whether the relevant date for computing the six-month period was the date of the Bill of Entry or the date of clearance receipt of the goods.

Analysis: The imported goods were assessed to duty and duty was paid on 20-1-1996. There was no evidence that the goods were detained by Customs after assessment or that there was any delay in clearance attributable to Customs. In the absence of proof of detention, the date of clearance could reasonably be taken as a day or two after payment of duty. The documents relied upon for availing credit were not authorised documents for the purpose of Rule 57G(2), and the credit was taken well beyond six months from the relevant date in one case and by about four months in the other. The Tribunal distinguished the earlier decision relied upon by the assessee because that case involved clearance from the custody of the custodian, which was not the position here.

Conclusion: The Modvat credit was wrongly allowed and was time-barred; the appeal of the Revenue succeeds.

Ratio Decidendi: Where imported goods are not shown to have been detained by Customs after assessment and payment of duty, the six-month period under Rule 57G(5) of the Central Excise Rules, 1994 is to be reckoned from the relevant clearance date, not from the Bill of Entry, and unsupported reliance on unauthorised documents cannot extend the limitation period.

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