Transitional Modvat credit cannot be denied for delay when the Rule 57H declaration is filed before credit is taken.

Transitional Modvat credit on inputs lying in stock could not be denied where the Rule 57H declaration was filed before the credit was actually taken and the substantive eligibility conditions were otherwise undisputed. The Revenue's objection based on late filing and alleged absence of power to condone delay was rejected because the declaration requirement was treated as satisfied once filed before availing credit. Duty payment on the inputs and the stock particulars were not disputed, so the claim was not barred on a mere delay objection.

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Issues: Whether Modvat credit on inputs lying in stock at the time of opting for the Modvat scheme could be denied on the ground that the declaration under Rule 57H was filed later and there was no provision for condoning delay.

Analysis: Rule 57H permits a manufacturer who has filed the declaration under Rule 57G to claim credit in respect of inputs lying in stock, provided the necessary declaration is filed before taking credit. In the present case, the declaration under Rule 57H was filed before the credit was availed, and the Revenue did not dispute either the duty payment on the inputs or the quantity of stock mentioned in the declaration. Since the credit was taken only after the required declaration, the question of treating the claim as barred by delay did not arise.

Conclusion: The denial of credit was unsustainable and was set aside in favour of the assessee.

Final Conclusion: Credit on eligible inputs lying in stock could not be denied merely on the basis of a supposed delay when the declaration was filed before availing the credit and the substantive conditions for availing the benefit were satisfied.

Ratio Decidendi: Where Rule 57H requires a declaration for transitional Modvat credit, filing that declaration before availing credit satisfies the condition, and the credit cannot be denied on a mere delay objection if the duty-paid stock and entitlement are otherwise undisputed.

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