Modvat credit on GI wires held admissible for the pre-20-5-1988 period under the then-applicable notification.

Modvat credit on GI wires was held admissible for the period before 20-5-1988 because Notification No. 177/86 then allowed deemed credit without production of duty-paid documents, and the later restriction applied only from that date. The High Court remand was not confined to PVC compound alone, as all contentions had been kept open, so the GI wires issue remained open for decision. The authority below therefore erred in excluding that issue and in denying credit on the mistaken assumption that the remand was limited.

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Issues: Whether Modvat credit on GI wires was admissible for the period prior to 20-5-1988, and whether the High Court remand confined the proceedings only to credit on PVC compound.

Analysis: The assessee had challenged denial of credit on GI wires in the writ proceedings, and the High Court kept all contentions open. The remand, therefore, was not limited to PVC compound alone, and the authority below erred in treating the issue of GI wires as excluded. On merits, Notification No. 177/86 permitted deemed credit without production of duty-paid documents, subject to the later-amended restriction applicable only from 20-5-1988. For the period in dispute, goods exempted from duty and goods chargeable to nil rate of duty were treated differently, and the amended restriction was not yet applicable.

Conclusion: Credit on GI wires was admissible to the assessee, and the denial of credit was unsustainable.

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