Modvat credit limitation excludes time spent correcting defective invoices needed to support credit entitlement.

For computing the six-month limit under Rule 57G for Modvat credit, the period reasonably consumed in rectifying defective invoices needed to evidence price and duty particulars is excluded. Where the underlying transaction is genuine, duty payment is undisputed, and credit is taken after corrected invoices are received, the time spent correcting the documents cannot be counted against the assessee. On that basis, the denial of Modvat credit was unsustainable.

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Issues: Whether Modvat credit was barred as having been taken beyond six months from the date of issue of the original invoices, or whether the period spent in getting defective invoices rectified had to be excluded while computing the limitation under Rule 57G.

Analysis: The invoices originally issued were found defective and were returned for correction so that the relevant particulars of price and duty could be incorporated. Credit was taken only after the revised invoices were received. There was no dispute as to the genuineness of the transaction, duty payment, or entitlement to credit. The delay resulted from the time consumed in rectifying the invoices between the supplier and the assessee. The governing principle applied was that time lost due to unforeseeable circumstances in correcting documents necessary for availing credit cannot be counted against the six-month period under Rule 57G.

Conclusion: The credit was not hit by limitation and the denial of Modvat credit was unsustainable.

Ratio Decidendi: For computing the six-month time limit under Rule 57G, the period reasonably consumed in rectifying defective invoices required for availing Modvat credit is to be excluded.

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