Modvat credit entitlement prevails over clerical error when higher notional credit is otherwise admissible.

A taxpayer eligible for higher notional Modvat credit under Rule 57B read with Notification No. 175/86 could later claim that credit even after initially taking a lower amount under Rule 57A. The substantive entitlement to the higher credit was not disputed, and a mistaken omission in recording the correct duty amount in the credit account did not extinguish the benefit conferred by the governing provisions. The disallowance of the additional credit was therefore not sustainable, because an accounting error could not override the underlying statutory eligibility for Modvat credit.

---

---

Issues: Whether an assessee who had already taken Modvat credit could subsequently take additional higher notional credit when it was later found to be admissible, and whether a mistaken omission in the credit account could defeat that entitlement.

Analysis: Under Rule 57A, credit was available for duty actually paid, and Rule 57B read with Notification No. 175/86 permitted higher notional credit where admissible. The assessee's eligibility to such higher credit was not disputed. A mere mistake in initially not recording the correct duty amount in the relevant account could not extinguish benefits conferred by the substantive provisions governing Modvat credit.

Conclusion: The assessee was entitled to take the higher notional credit subsequently, and the disallowance was unsustainable.

---