Transitional Modvat credit under Rule 57H cannot be restricted by Rule 57G delay limits, preserving independent credit entitlement.

Rule 57H was treated as a separate transitional provision for Modvat credit on inputs already lying in stock or contained in semi-finished or final products, and its operation was held independent of the delay and six-month limits linked to Rule 57G. The six-month restriction in Rule 57G(5) could not be imported into Rule 57H, because that would defeat the purpose of the transitional credit scheme and impose a restrictive construction not found in the provision itself. The denial of credit on that basis was therefore unsustainable, and the claim under Rule 57H required fresh reconsideration.

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Issues: Whether credit on inputs lying in stock, or contained in semi-finished or final products, could be allowed under Rule 57H independently of the delay and six-month restrictions associated with Rule 57G.

Analysis: Rule 57H operates as a separate transitional provision intended to extend Modvat credit on inputs received before filing of the declaration. Its operation is not dependent on condonation of delay in respect of the declaration under Rule 57G. The limitation in Rule 57G(5) regarding taking credit after six months from the date of invoice cannot be imported into Rule 57H, because doing so would frustrate the object of the transitional provision and amount to an impermissible restrictive construction.

Conclusion: The denial of credit on that basis was unsustainable, and the appellant's claim under Rule 57H had to be reconsidered afresh.

Final Conclusion: The matter was sent back for fresh adjudication of the claim for Modvat credit under the transitional provision, with the appellant succeeding on the legal issue.

Ratio Decidendi: A transitional credit provision must be construed independently on its own terms, and restrictions attached to a different provision cannot be read into it so as to defeat its purpose.

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