Prospective application of Modvat credit limitation prevents denial of credit already taken before the amendment.

A newly introduced six-month limitation for availing Modvat credit under Rule 57G(2) was held to apply prospectively only, so credit taken before the amendment could not be denied on that basis. Rule 57-I was also found inapplicable because it governs recovery where duty has been short-levied or credit has been wrongly taken, whereas the dispute concerned denial of credit under Rule 57G. The precedent relied on for limitation in duty-demand cases was treated as distinguishable. The Revenue's challenge to the Modvat credit therefore failed.

---

---

Issues: Whether the six months limitation for taking Modvat credit under Rule 57G(2) could be applied retrospectively so as to deny credit taken on a certified copy of the gate pass, and whether Rule 57-I could be invoked in a case where no duty demand or recovery of erroneously taken credit was involved.

Analysis: The six months restriction introduced by the amendment to Rule 57G(2) was held to operate prospectively only, and credit taken before the amendment could not be denied on the basis of that time limit. The reliance on Rule 57-I was rejected because that provision applies to recovery where duty has been short levied or credit has been wrongly taken, whereas the dispute concerned denial of Modvat credit under Rule 57G. The cited precedent concerning limitation under the erstwhile rule governing duty demands was found inapplicable on the facts.

Conclusion: The retrospective application of the six months limitation was not permitted, and the Revenue's challenge to the Modvat credit failed.

Ratio Decidendi: A limitation newly introduced for availing Modvat credit cannot be applied retrospectively to credit already taken before the amendment, and a recovery provision aimed at short levy or erroneous credit cannot be used where the dispute is only about denial of credit.

---