Transitional Modvat credit confined to inputs in stock as such; deleted coverage for used inputs could not be read back in.

Deletion of clause (ii) from Rule 57H(1) confined transitional Modvat credit to inputs lying in stock as such and excluded inputs already used in manufacturing finished goods. The expression "inputs in stock" was construed narrowly to mean goods present as inputs, not materials converted into final products. The omitted category could not be read back into the rule by interpretation, and the later reintroduction of that coverage confirmed the earlier deletion. Transitional credit was therefore not admissible for inputs contained in final products lying in stock after 5-5-1989.

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Issues: Whether, after the deletion of clause (ii) of Rule 57H(1) with effect from 5-5-1989, transitional Modvat credit remained available in respect of inputs already used in the manufacture of final products lying in stock on the date of filing the declaration under Rule 57G.

Analysis: Rule 57H, as it stood before 5-5-1989, expressly covered both inputs lying in stock and inputs used in the manufacture of final products cleared on or after 1-3-1987. After the amendment, clause (ii) was omitted and only the provision relating to inputs lying in stock remained. The omission could not be read as if the deleted clause continued to operate, because that would amount to supplying words to the rule. The expression "inputs in stock" was held to cover only inputs present as such, not inputs already converted into finished goods. The later reintroduction of the deleted coverage also confirmed that the earlier deletion had removed that benefit.

Conclusion: Transitional Modvat credit was not admissible in respect of inputs contained in final products lying in stock after 5-5-1989. The claim was rightly disallowed, and the finding was against the assessee.

Final Conclusion: The amended transitional rule was confined to inputs lying in stock as such, and the appeal failed because the deleted coverage for inputs already used in finished products could not be implied back into the provision.

Ratio Decidendi: Where a statutory amendment deletes an express category from a transitional credit provision, the omitted category cannot be revived by interpretation, and credit is confined to the surviving words of the rule.

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