P.G. Chacko, Member (J) - (1.)Modvat credit of Rs. 1,06,396/ - on furnace oil was denied to the appellants by the lower authorities for the period April to July, 1999. Hence this appeal.
(2.)The relevant facts of the case are as follows : 50% of the credit on furnace oil used as fuel during the above period was initially taken by the party. At that time, they did not choose to take the balance credit as they had used half of the total quantity of the furnace oil in relation to the manufacture of exempted final products. Later, they thought that they ought to have taken the remaining credit also as it occurred to them that the bar contained in Rules 57C and 57 CC was not applicable to fuels. In this view of the matter, they requested the jurisdictional Assistant Commissioner on 16 -11 -1999 for permission to avail the balance credit on furnace oil. This request received the following response.
"C.No. IV/16/73/99 Dated 12 -1 -2000 To M/s. Ammarun Foundries S.F. No. 80/6A, Rathinagiri Road Vilankurichi Coimbatore. Sir, Sub : Cex - Furnance oil - Modvat credit - reg. Please refer to your letter Reference No. 948/1999 -2000 dated 16 -11 -1999 on the above subject. In this regard, it is informed that our Assistant Commissioner of Central Excise, Coimbatore II division has accorded the permission for availing Modvat credit on furnace oil mentioned in your letter referred above subject observation of sub -rule 5 of Rule 57 G of Central Excise Act, 1944. Yours faithfully, Sd/ - (C. Rajendran) Superintendent(Tech)"

Pursuant to the above communication received from the department, the assessee took the balance credit on 21st January, 2000 in their RG 23A Part II and this was to the extent of Rs. 1,06,369/ - As the relevant invoices evidencing payment of duty on the furnace oil were dated 2 -4 -99 to 17 -7 -99, the taking of this credit was beyond six months from the date of invoice. Citing this fact, the department issued a show cause notice proposing to disallow the above credit as time -barred. The original authority and the first appellate authority upheld the department's view.

(3.)Heard both sides. Ld. Consultant for the appellants submits that the period of limitation of six months prescribed under Sub -rule 5 of Rule 57G of the erstwhile Central Excise Rules, 1944 was, in the facts of the case, not to be reckoned from the date of invoice. The period of limitation, according to the consultant, should be reckoned from the date (12 -1 -2000) on which the department granted permission to the assessee for availing the credit in question. In this connection, reliance is placed on the Tribunal's decision in Orient Paper and Industries Ltd. v. CCE, Indore [2002 (147) E.L.T. 933], wherein it was held, in the facts of that case, to the effect that the period of limitation of six months prescribed under Rule 57G for availment of input duty credit was to be computed from the date on which the departmental embargo on such availment of credit was lifted, which was the date of an order passed by the Tribunal. Ld. Consultant also relies on the Tribunal's decision in CCE, Hyderabad v. Aurobindo Pharma Ltd. [2001 (127) E.L.T. 786] wherein it was held that the period of limitation of six months prescribed under Rule 57G for taking input duty credit could be computed from the date on which the input was received in the factory as evidenced by the relevant entry in RG 23A. Part I. In the instant case, it is pointed out, the relevant entry pertaining to receipt of furnace oil in the factory was made in RG 23A Part I on 22 -9 -99 and therefore the credit of duty on the input taken on 21 -1 -2000 was within time. Before concluding his arguments, ld. Consultant has also cited the Supreme Court's judgment in Mangalore Chemicals and Fertilisers Ltd. v. DC wherein it was held to the effect that an assessee could not be prevented from availing a substantive right on account of delay of action on the part of the department.