Modvat credit on inputs may be claimed after receipt when correction is prompt and the delay is reasonable.

Modvat credit on inputs under Rule 57A could be taken after receipt where the balance credit was claimed within a short, reasonable period or immediately after a clerical mistake was noticed. The Tribunal noted that subsequent availment of the fuller credit was treated as permissible on these facts, and referred to approval of that view by the Gujarat High Court. The article therefore records that delayed or corrected taking of Modvat credit was accepted when the timing remained close to receipt and the omission was clerical in nature.

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Issues: Whether Modvat credit on inputs could be taken after the actual date of receipt of the inputs when the full duty credit was taken within a short time or immediately after a clerical mistake was noticed.

Analysis: The issue concerned the permissibility of taking the balance or fuller Modvat credit subsequent to receipt of inputs under Rule 57A of the Central Excise Rules. The Tribunal noted that the credit had been taken within a short span in one case and on the same date in another after a clerical error was detected. It also relied on the position that such subsequent credit was permissible when taken within a reasonable period, and that the view had been approved by the Gujarat High Court.

Conclusion: The subsequent availment of the fuller Modvat credit was held to be permissible, and the appeal was rejected.

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