MODVAT credit eligibility for stock in hand was upheld on a purposive reading of "immediately before" under Rule 57H.

Inputs held in stock before filing the MODVAT declaration were treated as qualifying for credit under Rule 57H, because the phrase "immediately before" was construed in light of the scheme's object and legislative intent rather than by a narrow temporal reading. Where the inputs were duty-paid and supporting evidence was available, credit could not be denied merely because the declaration was filed later. The broader interpretation advanced the purpose of the MODVAT scheme and preserved credit entitlement for eligible stock on hand before acknowledgement of the declaration.

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Issues: Whether inputs lying in stock before filing of the declaration under the MODVAT scheme could be treated as having been received "immediately before" the dated acknowledgement of the declaration so as to qualify for credit under Rule 57H.

Analysis: The relevant scheme required receipt of duty-paid inputs and filing of the declaration. The meaning of "immediately before" was held to depend on the object of the MODVAT scheme and the legislative intent behind Rule 57H. The Tribunal followed its earlier ruling that credit could not be denied merely because the inputs were received before filing the declaration, provided they were in stock and the duty-payment evidence was available. A broader construction that advanced the scheme's purpose was preferred over a narrow temporal reading.

Conclusion: The inputs in stock prior to filing of the declaration were eligible for MODVAT credit and the Revenue's challenge failed.

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