Transitional Modvat credit cannot be denied for delayed declaration or supposed prior permission where Rule 57H does not require both.

Modvat credit under Rule 57H could not be denied merely because the Rule 57G declaration was filed after receipt of inputs, since Rule 57H is a separate transitional provision with distinct, mutually exclusive contingencies. The note states that both conditions need not coexist and that prior permission is not a precondition for invoking Rule 57H unless the rule itself so requires. On that interpretation, denial of credit on the stated grounds was not sustainable, and eligibility had to be rechecked on the prescribed factual conditions under the transitional Modvat scheme.

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Issues: Whether Modvat credit could be denied merely because the declaration under Rule 57G was filed after receipt of inputs, and whether Rule 57H required prior permission before availing the transitional credit facility.

Analysis: Rule 57G requires a declaration before availing Modvat credit, but Rule 57H operates as a transitional provision for specified contingencies. The two situations covered by Rule 57H are distinct and mutually exclusive, and they do not have to coexist. Credit cannot be denied on the mistaken assumption that both conditions must be satisfied together. The requirement of prior permission before invoking Rule 57H was also found to have no basis.

Conclusion: The denial of credit on the stated grounds was not sustainable. The appellant was entitled to have the claim reconsidered under Rule 57H, and credit was admissible if the prescribed factual conditions were satisfied.

Final Conclusion: The matter was sent back for fresh verification of eligibility under the transitional Modvat scheme, with the appellant obtaining the benefit of the corrected legal interpretation.

Ratio Decidendi: Transitional Modvat credit under Rule 57H cannot be refused on the premise that separate statutory situations must coexist or that prior permission is a precondition where the rule does not so provide.

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