Modvat credit recovery is bound by statutory limitation; subordinate rules cannot extend the demand period beyond the parent Act.

Recovery of deemed Modvat credit was treated as a demand for duty short levied or erroneously refunded, so limitation under section 11A of the Central Excises & Salt Act, 1944 applied. A notice issued after six months could not be sustained by invoking the extended period through Rule 57-I because subordinate Modvat rules cannot override the limitation fixed by the parent statute. The Assistant Collector was therefore held to have acted beyond jurisdiction in confirming the demand in that manner, and the impugned order was set aside with further action left to the Collector of Central Excise.

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Issues: Whether recovery of Modvat credit could be sustained when the notice was issued beyond six months and the demand was sought to be confirmed by invoking the extended period under section 11A, and whether Rule 57-I could override the limitation under the parent statute.

Analysis: The notice proposed recovery of deemed Modvat credit for the relevant period after expiry of six months. The demand was treated as one falling under section 11A of the Central Excises & Salt Act, 1944, because recovery of duty short levied, short paid, or erroneously refunded is governed by that provision. The subordinate Modvat rules could not override the limitation built into the parent enactment, and the Assistant Collector was held to have acted in excess of jurisdiction in confirming the demand by invoking the extended period.

Conclusion: The demand could not be sustained in the manner adopted by the Assistant Collector, and the impugned order was set aside with a direction for further action by the Collector of Central Excise.

Ratio Decidendi: Recovery of Modvat credit is subject to the limitation prescribed by section 11A of the Central Excises & Salt Act, 1944, and subordinate rules cannot override the parent statute.

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