Reasonable time limits govern Modvat credit claims even without express limitation, and delayed availment was rejected.

Higher notional Modvat credit under Rule 57B had to be claimed within a reasonable time even though no express limitation period was prescribed. The Madras HC treated six months as a reasonable benchmark by reference to analogous excise limitation provisions, and held that a claim made after about eight months, without sufficient justification for the delay, could not be accepted. The recovery order was therefore sustained and the assessee was denied the delayed credit.

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Issues: Whether higher notional Modvat credit under Rule 57B could be availed after a delay of about eight months, in the absence of an express statutory period of limitation.

Analysis: The credit claim was not in dispute on eligibility, but the Court held that absence of an express limitation did not permit availment at any time at the assessee's choice. Applying the principle of exercise of rights within a reasonable period, the authorities treated six months as a reasonable time, drawing support from the limitation period then applicable under analogous excise provisions. Since the credit was taken after about eight months and no sufficient justification for the delay was accepted, the concurrent findings of the authorities were not considered fit for interference.

Conclusion: The assessee was not entitled to avail the higher notional credit after the delayed period, and the challenge to the recovery order failed.

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