Modvat credit on non-input goods cannot be claimed, and later accessory notifications do not operate retrospectively without express wording.

Modvat credit was denied on detergent cake because it was not an input used in manufacturing detergent powder, and the claim to treat it as an accessory was outside the scope of the dispute. A later notification extending credit to accessories did not apply to the earlier period, as amendments operate prospectively unless express retrospective effect is provided. The denial of credit was therefore sustained, with the demand only partly reduced to reflect allowance from 29-6-1995.

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Issues: Whether modvat credit was admissible on detergent cake supplied along with detergent powder as an input for the manufacture of detergent powder, and whether the later notification treating accessories as eligible could be applied retrospectively.

Analysis: The detergent cake was conceded not to be an input for detergent powder. The appeal was confined to that question, and the claim that it should be treated as an accessory was outside the scope of the dispute. Credit was therefore unavailable on the ground that the item was not an input. The later notification extending credit to accessories could not be applied to the earlier period in the absence of express retrospective effect, as amendments operate prospectively unless specifically made retrospective.

Conclusion: Modvat credit on detergent cake was not admissible for the period in dispute, and the denial of credit was upheld, with only a reduction in the quantum of demand.

Final Conclusion: The appeal failed on the substantive eligibility of credit, though the demand was partially reduced to reflect the post-notification allowance from 29-6-1995.

Ratio Decidendi: Credit is not available on an item that is not an input for the manufactured product, and a subsequent notification enlarging eligibility cannot be applied retrospectively unless such intent is expressly provided.

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