Transitional MODVAT credit under Rule 57H is confined to actual duty paid; Rule 57B's higher notional benefit does not apply.

Higher notional MODVAT credit under Rule 57B cannot be extended to inputs covered by transitional credit under Rule 57H. Rule 57B is an exception to Rule 57A that grants enhanced notional credit for purchases from small scale or exempted units, but Rule 57H is a separate transitional provision for inputs already in stock before the dated acknowledgement under Rule 57G. Because Rule 57H allows only the actual duty paid on such pre-declaration inputs, the higher notional benefit under Rule 57B cannot be imported into that scheme. The credit is therefore confined to actual duty paid, and the Revenue's objection succeeds.

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Issues: Whether higher notional MODVAT credit under Rule 57B of the Central Excise Rules, 1944 could be granted on inputs lying in stock and covered by transitional credit under Rule 57H of the Central Excise Rules, 1944.

Analysis: Rule 57B was enacted as an exception to Rule 57A to confer higher notional credit where inputs were procured from small scale or exempted units, so as to provide an incentive to purchase from that sector. Rule 57H, however, is a distinct transitional provision meant to permit credit on inputs received before the assessee obtained the dated acknowledgement required under Rule 57G. The wording of Rule 57H limits the allowance to the duty actually paid on such inputs, and its non obstante clause operates only against Rule 57G. The benefit under Rule 57B cannot be imported into Rule 57H, because the transitional credit is for pre-declaration stock and does not contemplate the notional enhancement available when inputs are purchased after opting into the MODVAT scheme.

Conclusion: Higher notional credit under Rule 57B is not available under Rule 57H for inputs already lying in stock; the credit is confined to the actual duty paid, and the Revenue's objection succeeds.

Ratio Decidendi: Transitional MODVAT credit under Rule 57H is confined to the actual duty paid on pre-declaration inputs, and the notional higher credit available under Rule 57B for small scale sector purchases cannot be read into that provision.

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