Modvat credit and job-worker returns: later sixty-day condition could not be applied retrospectively or imposed by circulars.

Rule 57F(3) did not impose a sixty-day return requirement for inputs sent to job-workers during the relevant period, and that condition was introduced only later by amendment. The Tribunal held that the amendment could not operate retrospectively and that circulars or trade notices could not add a substantive condition not found in the rule. The demand and penalty were therefore unsustainable, and Modvat credit was allowed.

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Issues: Whether the absence of a sixty-day return condition in Rule 57F(3) during the relevant period could be used to deny Modvat credit, and whether circulars and trade notices could supply such a condition.

Analysis: Rule 57F(3) had not prescribed any requirement that inputs sent to job-workers must be returned within sixty days during the relevant period. The sixty-day condition was introduced only later by amendment and could not be applied retrospectively. Administrative circulars and trade notices could not add substantive conditions to the rule. The Tribunal also treated such circulars as not binding upon it when interpreting the law as it stood.

Conclusion: The demand and penalty were unsustainable, and the appellants were entitled to Modvat credit.

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