COMMNR. OF CENTRAL EXCISE, MADRAS vs M/S. HOME ASHOK LEYLAND LTD.

The Supreme Court addressed the entitlement of the assessee to avail MODVAT credit on differential duty paid from 21.4.1986 to 2.4.1987 for inputs utilized between 16.8.1987 and 30.12.1987. The Court held that the amendment to Rule 57E of the Central Excise Rules, 1944, which was effective from 15.4.1987, operated prospectively and did not affect the assessee's right to claim credit for the differential duty paid prior to this date. Consequently, the assessee was entitled to the MODVAT credit amounting to Rs.6,43,994.47, affirming the applicability of the MODVAT Scheme introduced on 1.3.1986.