Credit restriction under a notification depends on the date of receipt of inputs, not the later duty payment date.

Credit restriction under Notification No. 14/98 dated 2 June 1998 applied only to inputs received in the factory on or after that cut-off date, as clarified by CBEC Circular No. 421/54/98-CX dated 10 September 1998. Where the inputs were received before 2 June 1998, the assessee was entitled to credit of the actual countervailing duty paid, and the later cash payment of duty did not attract the 95% limitation. The controlling date for the restriction was therefore the date of receipt of inputs, not the date of duty payment.

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Issues: Whether the assessee was entitled to take credit of the actual countervailing duty paid or whether the credit was restricted to 95% of the duty where the inputs had been received in the factory before 2 June 1998, but duty was later paid in cash.

Analysis: The dispute turned on the relevant date for applying the restriction under Notification No. 14/98 dated 2-6-1998. The Board's Circular No. 421/54/98-CX dated 10-9-98 clarified that the 95% restriction applied only where inputs were received in the factory on or after 2 June 1998. Since the inputs in the present case had been received in April 1998, the date of receipt was the decisive factor and not the later date on which duty was paid in cash.

Conclusion: The restriction of 95% credit was not applicable, and the assessee was entitled to credit of the actual duty paid.

Final Conclusion: The appeal succeeded because the notification-based restriction could not be applied to inputs received before the relevant cut-off date.

Ratio Decidendi: For applying a credit restriction linked to a notification, the controlling date is the date of receipt of inputs in the factory when the governing circular so clarifies.

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