Transitional MODVAT credit cannot be rejected for missing an assumed deadline; eligibility must be examined on merits.

Transitional MODVAT credit under Rule 57H could not be rejected merely because the application was filed after an assumed 31 March 1986 cutoff, as the rule did not prescribe any filing deadline. The authorities had wrongly treated the date as mandatory despite the assessee's declaration being on record on 31 March 1986. Because the substantive eligibility to credit had not been examined, the proper course was to have the claim considered afresh on merits. The rejection for delay was therefore unsustainable, and the matter was remanded for determination of entitlement to credit.

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Issues: Whether rejection of transitional MODVAT credit under Rule 57H on the ground that the application was filed after 31 March 1986 was sustainable, and whether the matter required remand for consideration on merits.

Analysis: Rule 57H governing transitional credit did not prescribe any specific time limit for filing an application for availing the benefit. The authorities below proceeded on the mistaken assumption that a separate application had to be filed by 31 March 1986. The record also showed that the assessee had made a declaration on 31 March 1986, and the only issue left unexamined was the substantive eligibility to credit. Since the merits had not been considered, the proper course was to have the claim examined afresh by the Assistant Collector.

Conclusion: The rejection on the ground of delay was unsustainable, and the matter was remanded to the Assistant Collector to entertain the application and decide eligibility on merits.

Ratio Decidendi: Where a transitional credit provision does not prescribe a filing deadline, the claim cannot be rejected merely for want of an application by an assumed cutoff date, and the entitlement must be examined on merits.

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