Modvat credit on aluminium shots remained admissible despite belated entry, as the six-month limit applied prospectively.

Deemed Modvat credit on aluminium shots was considered admissible where the assessee took the credit belatedly during the relevant period. The applicable Modvat scheme under Rules 57A to 57P of the Central Excise Rules, 1944 was read to mean that no limitation period governed the taking of credit at that time, and the later six-month limit under Rule 57G applied only prospectively. Accordingly, delayed entry of the credit did not by itself make the credit inadmissible, and the limitation objection failed in favour of the assessee.

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Issues: Whether deemed Modvat credit on aluminium shots was admissible when the credit was taken belatedly and whether any limitation period barred such availment during the relevant period.

Analysis: The credit scheme under Rules 57A to 57P of the Central Excise Rules, 1944 governed the availment of Modvat credit. The relevant judicial principle applied was that, for the period in question, no limitation had been prescribed for taking Modvat credit, and the later insertion of a six-month limit under Rule 57G operated prospectively. On that basis, the delayed entry of credit did not by itself render the credit inadmissible.

Conclusion: Deemed Modvat credit was admissible, and the limitation objection failed in favour of the assessee.

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