Prospective money credit under Central Excise rules requires prior declaration and acknowledgment before inputs are received.

Rule 57-O of the Central Excise Rules, 1944 makes filing a declaration and obtaining a dated acknowledgment a statutory condition for availing money credit on inputs. The rule is construed as operating prospectively, so credit is linked to prior intimation of the intended final products and inputs and compliance with the prescribed procedure before receipt of inputs. On that reading, money credit is not admissible for inputs received before the declaration is filed and acknowledged; the benefit applies only after procedural compliance, and the answer is against the assessee.

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Issues: Whether, under Rule 57-O of the Central Excise Rules, 1944, money credit is admissible in respect of inputs received before filing the declaration and obtaining acknowledgment, or only in respect of inputs received after compliance with the declaration procedure.

Analysis: Rule 57-O(1) requires every manufacturer intending to take credit to file a declaration specifying the final products and the inputs intended to be used, and to obtain a dated acknowledgment. Rule 57-O(2) permits a manufacturer who has filed such declaration, after obtaining acknowledgment, to take credit of money on the inputs. The filing of the declaration is therefore a statutory precondition to the availment of credit. A close reading of the rule shows that the credit mechanism operates prospectively and is linked to prior intimation to the Department of the intended inputs and compliance with the prescribed procedure.

Conclusion: Money credit is not available on inputs received before filing the declaration. The benefit under Rule 57-O applies only after filing the declaration and obtaining acknowledgment, and the answer is against the assessee.

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