Input credit under Rule 57G cannot be denied solely because the declaration was filed after receipt, where exemption was bona fide believed.

Credit on duty-paid inputs was not barred merely because the Rule 57G declaration was filed after receipt of the inputs, so long as acknowledgment was obtained. The manufacturer's delay was attributable to a bona fide belief that the finished product was exempt, and the later finding that the product was dutiable did not defeat credit eligibility. The subsequent insertion of sub-rule (5) was treated as confirming that such prior inability to file should not automatically forfeit credit. Denial of credit was therefore unsustainable.

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Issues: Whether credit on duty paid inputs could be taken where the declaration under Rule 57G was filed after receipt of the inputs, when the finished product was initially treated as exempt but was later held dutiable.

Analysis: Rule 57G does not expressly prohibit availment of credit on inputs received before the declaration is filed, once acknowledgment is obtained. The manufacturer's failure to file an earlier declaration was linked to the bona fide belief that the finished goods were exempt from duty. The later insertion of sub-rule (5) reflects the legislative recognition that such a situation should not defeat credit eligibility where the manufacturer was not in a position to file the declaration earlier.

Conclusion: Credit on the inputs could not be denied merely because the declaration was filed after the inputs were received. The denial of credit was unsustainable and the assessee succeeded.

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