Limitation for Modvat credit recovery follows Section 11A where the rule is silent, making a delayed demand unsustainable.

A demand for recovery of wrongly utilised Modvat credit under Rule 57-I was held to be governed by the limitation in Section 11A of the Central Excises and Salt Act, because rules under the statute are supplementary and the rule did not exclude limitation. As the notice was issued beyond six months from the relevant date, the demand was time-barred and not sustainable. The reasoning also noted that even on a reasonable-time approach, six months would be the applicable period in the circumstances, and the earlier view on the Collector's competence to issue an extended-period notice was left undisturbed.

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Issues: Whether a demand for recovery of wrongly utilised Modvat credit under Rule 57-I could be sustained when the notice was issued beyond six months and the notice had also invoked Section 11A of the Central Excises and Salt Act, 1944.

Analysis: Rule 57-I, as it then stood, did not itself prescribe any separate limitation period, but rules framed under the statute are supplementary to the parent enactment and, unless expressly excluded, the statutory limitation under Section 11A applies to such demands. The notice in question was issued beyond six months from the relevant date. Even on the alternative view that the demand had to be raised within a reasonable time, the Court treated six months as the reasonable period in the circumstances. The earlier view that the Collector was the competent authority for an extended-period notice was also left undisturbed.

Conclusion: The demand was time-barred and the Department's challenge failed.

Ratio Decidendi: Where a demand under a rule is supplementary to the parent statute and the rule does not exclude limitation, the limitation prescribed by the statute governs the demand, and a notice issued beyond that period is not sustainable.

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