Limitation for wrong credit recovery under excise rules runs from the date of taking credit, supporting a prima facie time-bar case.

For recovery of wrongly availed credit under Rule 57-I(1), limitation runs from the date of taking credit, and a notice issued beyond six months from that date raises a strong prima facie time-bar case. On the facts stated, the demand was treated as time-barred on the face of the record, so waiver of pre-deposit and stay of recovery were granted to the assessee.

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Issues: Whether the appellants made out a strong prima facie case for waiver of pre-deposit and stay of recovery on the ground that the demand was barred by limitation under Rule 57-I(1) of the Central Excise Rules, 1944.

Analysis: The notice proceeded on the basis that credit had not been taken in time, and the adjudication order treated credit taken in 1993 against inputs received during 1989-1992 as recoverable under Rule 57-I. On the face of the record, the notices were issued beyond six months from the date of taking credit. In these circumstances, and on the terms of the notice and adjudication order, the limitation plea under Rule 57-I(1) was found to raise a strong prima facie case. The limitation period was treated as running from the date of taking credit.

Conclusion: The plea of limitation succeeded at the prima facie stage, and waiver of pre-deposit with stay of recovery was granted in favour of the assessee.

Ratio Decidendi: For recovery of wrongly availed credit under Rule 57-I(1), limitation is computed from the date of taking credit, and where the notice is issued beyond six months from that date, a prima facie case of time-bar is made out.

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