Modvat credit eligibility turns on the date of receipt, and later restoring notifications are not retrospective without clear intent.

Modvat credit on capital goods under Rule 57Q depended on the law in force on the date the goods were received, not on the later date of installation or use. Installation was treated only as a procedural step for availing credit and did not defer legal eligibility. A notification later restoring capital goods to the rule's scope was not treated as clarificatory or retrospective, because no express intent for retrospective operation was shown. Accordingly, goods received during the exclusion period remained outside eligibility, and the later amendment did not revive credit for that period.

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Issues: (i) Whether Modvat credit on capital goods under Rule 57Q became available on the date of receipt of the goods or on the date of installation or use of the goods in the factory. (ii) Whether the notification restoring capital goods to the scope of Rule 57Q was clarificatory so as to apply retrospectively to goods received during the exclusion period.

Issue (i): Whether Modvat credit on capital goods under Rule 57Q became available on the date of receipt of the goods or on the date of installation or use of the goods in the factory.

Analysis: The relevant capital goods were received during the period when they stood excluded from the scope of Modvat credit. The entitlement to credit was held to arise with reference to the law prevailing on the date of receipt, not the later date of installation. Installation was treated only as a deferred administrative step for availing credit and did not postpone the point of legal eligibility.

Conclusion: The date of receipt governed eligibility, and the assessee was not entitled to Modvat credit for goods received during the exclusion period. The conclusion is against the assessee.

Issue (ii): Whether the notification restoring capital goods to the scope of Rule 57Q was clarificatory so as to apply retrospectively to goods received during the exclusion period.

Analysis: The later notification was not shown to be clarificatory. The exclusion under the earlier notification operated for a defined period, and the subsequent inclusion did not by itself indicate retrospective intent. In the absence of an express indication that the amendment was clarificatory, retrospective application was not accepted.

Conclusion: The restoring notification was not treated as clarificatory or retrospective. The conclusion is against the assessee.

Final Conclusion: The appeal failed because Modvat credit could not be claimed on capital goods received when they were excluded from eligibility, and the subsequent notification did not revive that entitlement retrospectively.

Ratio Decidendi: For Modvat credit on capital goods, eligibility is determined by the law in force on the date of receipt of the goods, and a later notification will not operate retrospectively unless its clarificatory or retrospective intent is ly established.

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