Deemed credit under Notification 29/96 may be taken belatedly when no express prohibition applies and Rule 57G is inapplicable.

Deemed credit under Notification No. 29/96 was treated as available even when entered after clearance of processed fabrics, because the notification contained no express bar on belated availment. Rule 57G was held inapplicable since the deemed-credit documents were not the type contemplated by its six-month restriction. The entitlement was linked to removal of the final product, and the delayed entry was accepted as a bona fide mistake of law. On that basis, denial of deemed credit was unsustainable and the assessee's claim was sustained.

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Issues: Whether deemed credit under Notification No. 29/96 could be taken belatedly after clearance of the processed fabrics and whether such credit was barred by Rule 57G.

Analysis: The notification did not contain any prohibition against a textile processor taking deemed credit at a later stage than the actual clearance of the processed fabrics. The limitation bar under Rule 57G was held inapplicable because the deemed-credit documents were not the class of documents contemplated by that rule for the six-month restriction. The entitlement to credit was treated as arising on removal of the final product, and the delayed entry was accepted as a bona fide error in understanding the law.

Conclusion: The denial of deemed credit was unsustainable and the credit was allowed in favour of the assessee.

Final Conclusion: The impugned orders were set aside and the assessee's claim to deemed credit was sustained.

Ratio Decidendi: In the absence of an express prohibition in the relevant notification, deemed credit may be taken belatedly where the statutory limitation rule does not apply and the delay results from a bona fide mistake of law.

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