Accrued Modvat credit cannot be denied by a later six-month filing limit applied retrospectively.

Modvat credit could not be denied where the goods had been received and entered in RG 23A Part I before Notification No. 28/95 introduced a six-month limit for taking credit under Rule 57G. The entitlement to credit had already accrued before the amendment, and the notification contained no express retrospective effect. In these circumstances, the later time restriction could not be used to defeat the accrued right. The assessee was therefore entitled to the credit, and denial of Modvat credit was not sustainable.

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Issues: Whether Modvat credit could be denied on the ground that it was taken after six months from the date of issuance of the duty-paying documents when the goods had been received before the amendment introducing that restriction.

Analysis: The restriction of six months for taking Modvat credit was introduced by Notification No. 28/95, which amended Rule 57G of the Central Excise Rules. The goods had been received and entered in the RG 23A Part I register before the notification came into force. The right to take credit had therefore accrued prior to the amendment, and the notification did not contain any express provision giving it retrospective effect. In such a situation, the subsequent time restriction could not be applied to defeat the accrued entitlement.

Conclusion: The denial of Modvat credit was not sustainable, and the assessee was entitled to the credit.

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