Modvat re-credit barred by finality, lack of review power, and six-month limitation under excise credit rules.

Modvat re-credit was inadmissible where an earlier disallowance of credit had already attained finality and the later order permitting re-credit was passed without any statutory power of review. The credit also failed on limitation because the invoices were older than six months when the credit was taken, and the time-limit under Rule 57G(5), as amended by Notification No. 28/95-C.E. (N.T.), applied. An objection that the authority exceeded the show-cause notice was rejected because limitation had been specifically proposed in the notice.

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Issues: Whether the assessee was entitled to re-credit Modvat credit on the strength of invoices issued long before the credit was taken, and whether the order allowing such re-credit could survive when the earlier disallowance had attained finality and the later order was passed without jurisdiction.

Analysis: The earlier order disallowing credit had not been appealed against and had been acted upon by reversal of credit, so it had attained finality. The later order permitting re-credit under Rule 57H operated in the nature of a review of the earlier order, but no power of review existed under the Central Excise law. The re-credit was therefore without legal sanction. Independently, the credit was also barred by limitation because the invoices were much older than six months when the credit was taken, and the time-limit under Rule 57G(5), as applied after the amendment by Notification No. 28/95-C.E. (N.T.), was attracted. The objection that the adjudicating authority had travelled beyond the show-cause notice was also rejected because limitation had been specifically proposed in the notice.

Conclusion: The re-credit of Modvat credit was inadmissible, the later permission order was without jurisdiction, and the Revenue's challenge succeeded.

Final Conclusion: The assessee could not retain the credit, and the appellate order in its favour was set aside.

Ratio Decidendi: A later order granting Modvat re-credit cannot override a final earlier disallowance when passed without jurisdiction, and credit taken beyond the prescribed time-limit is inadmissible even if the limitation issue was raised in the show-cause notice.

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