Rule 57H overrides Rule 57G for Modvat credit where eligibility arose later and duty-paid inputs met the conditions.

Rule 57H, which begins with a non-obstante clause, overrides the restriction in Rule 57G where Modvat credit is claimed under Rule 57H. On the stated facts, the inputs were duty paid and the assessee became eligible to take credit only on 16-3-1995, so credit could not have been validly taken earlier merely on the basis of pre-31-3-1994 gate passes. The conditions for Rule 57H were therefore satisfied, and the Revenue's objection founded on Rule 57G was not sustainable.

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Issues: Whether Modvat credit on the strength of gate passes issued prior to 31-3-1994 could be denied by applying Rule 57G of the Central Excise Rules, 1944, when the credit was claimed under Rule 57H of the Central Excise Rules, 1944.

Analysis: Rule 57H begins with a non-obstante clause. The effect of such a clause is to exclude the operation of Rule 57G in a case where credit is claimed under Rule 57H. The inputs were duty paid and the assessee's eligibility to take credit arose only on 16-3-1995. In that situation, credit could not have been validly taken earlier on the basis of the old gate passes, and the conditions for Rule 57H were satisfied. The interpretation adopted by the appellate authority correctly treated Rule 57H as overriding the restriction relied on by the Revenue.

Conclusion: The credit was permissible under Rule 57H, and the Revenue's objection based on Rule 57G was not sustainable.

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