Money credit on existing stock remains available after fresh acknowledgement when the restored scheme and procedural safeguards are satisfied

Rule 57-O required a manufacturer to file a declaration and obtain dated acknowledgement before taking money credit, but it did not expressly limit credit to inputs received only after that acknowledgement. After the money credit scheme was restored by later notification, credit was treated as admissible on stock of inputs already lying in the factory where the fresh declaration had been acknowledged and the notification procedure and safeguards were satisfied. The absence of an express transitional provision was not taken as a ground to deny credit on existing stock. The cited liberal construction of the rule was applied, and credit on the stock was allowed.

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Issues: Whether credit under the money credit scheme was admissible on stock of inputs lying in the factory before the dated acknowledgement of the fresh declaration filed under Rule 57-O after restoration of the scheme by the later notification.

Analysis: The operative requirement under Rule 57-O(2) is that the manufacturer must file a declaration and obtain dated acknowledgement before taking credit. The rule does not expressly confine credit only to inputs received after such acknowledgement. The earlier declaration was already on record, the scheme was restored by the later notification, and the credit was taken only after the fresh acknowledgement. In these circumstances, the absence of a fresh transitional provision could not justify denial of credit, particularly when the relevant procedural safeguards under the restored notification were to be satisfied. The cited precedent supporting a liberal construction of the rule was treated as fully applicable.

Conclusion: The credit on the stock was admissible, and the disallowance was set aside in favour of the assessee.

Final Conclusion: The restored money credit scheme was held to permit credit on existing stock after fresh acknowledgement, subject to compliance with the notification procedure and safeguards.

Ratio Decidendi: Where Rule 57-O requires dated acknowledgement before credit is taken, but does not expressly restrict credit to inputs received after such acknowledgement, credit cannot be denied on pre-existing stock if the relevant notification and procedural safeguards are satisfied.

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