Transitional capital goods credit under Rule 57AC(2)(c) limited second-year claim to the balance of total admissible credit.

Rule 57AC(2)(c) governed transitional CENVAT credit for capital goods received before 1 April 2000 but installed later, so entitlement had to be determined by the position on the date of receipt. The text states that the Supreme Court clarification supported availability of relief under Rule 57AC(2)(c), but did not permit a fresh 50% entitlement in the second year or a 100% credit approach. The total admissible credit remained 75% of duty at receipt, and the amount claimable in 2001-2002 was only the balance after credit already taken in the first year, with recomputation left to the original adjudicating authority.

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Issues: Whether, for capital goods received before 1 April 2000 but installed thereafter, the credit admissible for the second year under Rule 57AC(2)(c) of the Central Excise Rules, 1944 was confined to the balance of the overall credit available on the date of receipt, and whether the quantum required recomputation by the original authority.

Analysis: The credit entitlement had to be determined with reference to the position obtaining on the date the capital goods were received, because Rule 57AC(2)(c) governed the transitional availment of credit for goods received before 1 April 2000 but installed later. The clarification of the Supreme Court was read as affirming that relief was available under Rule 57AC(2)(c), and that the earlier view permitting 100% credit or treating the later year as independently allowing 50% was not correct. On that basis, the total credit admissible remained the credit applicable at receipt, namely 75% of the duty, and the amount available in 2001-2002 would be only the balance after reducing what had already been taken in the first year.

Conclusion: The assessee was not entitled to treat the second year as carrying an independent entitlement of 50%; the total admissible credit was held to be 75%, and the exact balance credit for 2001-2002 was left to be worked out by the original adjudicating authority.

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