Transitional credit entitlement preserved when a substituted credit scheme left the substantive benefit unchanged.

A transitional credit provision preserved the dealer's entitlement to credit for the period after the Proforma Credit Scheme was withdrawn and before the Modvat Credit Scheme fully applied, because the substantive credit available under both schemes was the same. The Tribunal's view that Rule 57H(1) of the Central Excise Rules, 1944 protected the intervening claim was upheld, and the dealer's credit entitlement for the relevant period was maintained. The revenue's challenge failed, as the substitution of one credit scheme for another did not defeat an otherwise identical substantive credit right.

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Issues: Whether credit was admissible to the dealer for the period 20-5-1994 to 2-6-1994 under the transitional provision when the Proforma Credit Scheme had been withdrawn and the Modvat Credit Scheme had come into force.

Analysis: The appeal turned on the effect of the withdrawal of the Proforma Credit Scheme and substitution by the Modvat Credit Scheme. The Tribunal had treated Rule 57H(1) of the Central Excise Rules, 1944 as a transitional provision and held that the dealer remained entitled to credit for the relevant period. The Court found that, in substance, the credit admissible under either scheme was the same and that the dealer was entitled to the credit claimed.

Conclusion: The credit claim was upheld and the revenue's challenge failed.

Final Conclusion: The appeal did not succeed, and the order allowing the dealer's credit entitlement for the relevant period stood.

Ratio Decidendi: Where a credit scheme is substituted by another scheme and the substantive entitlement remains the same, a transitional provision may preserve the assessee's credit entitlement for the intervening period.

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