Transitional Modvat credit cannot be denied solely for pre-permission availment when timely application and input eligibility are shown.

Transitional Modvat credit under Rule 57H could not be refused merely because it was taken before formal permission was granted, where the assessee had already filed the required application and declaration and the eligibility of the inputs in stock was not disputed. The Tribunal treated the delay in granting permission as immaterial on these facts and held that the credit could be retained.

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Issues: Whether transitional Modvat credit under Rule 57H could be denied merely because the assessee took credit before the Jurisdictional Assistant Commissioner granted permission on an application already made along with the declaration.

Analysis: The application and statement of inputs in stock were on record. The only objection was the absence of prior permission at the time credit was taken. The Tribunal held that the transitional facility under Rule 57H cannot be denied solely on that ground where the assessee had applied for permission and there was delay in its grant, particularly when the eligibility of the inputs for credit was not in dispute.

Conclusion: The objection based only on the timing of permission failed, and the assessee was entitled to retain the credit.

Ratio Decidendi: Transitional Modvat credit on inputs in stock cannot be refused merely because it was availed before permission was granted, if the assessee had applied in time and the inputs were otherwise eligible.

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