Rule 57H credit on inputs and prior permission: interpretive dispute held to raise a referable question of law.

Rule 57H of the Central Excise Rules, 1944 was interpreted as not expressly requiring prior permission of the Assistant Collector before credit on inputs could be taken, with earlier decisions treating credit as allowable once the rule's conditions were met. The Tribunal nevertheless treated the dispute over the rule's meaning as a question of law, noting the absence of a superior forum ruling on the point. It therefore found a referable question of law and directed that the issue be forwarded for reference to the High Court.

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Issues: Whether, on the facts and in the light of Rule 57H of the Central Excise Rules, 1944, a question of law arose for reference to the High Court on the requirement of prior permission of the Assistant Collector before availing credit on inputs.

Analysis: The Tribunal noted that earlier decisions had taken the view that Rule 57H did not contain any stipulation requiring prior permission of the Assistant Collector and that credit was allowable once the conditions of the rule were satisfied. The rule, as reproduced, empowered the Assistant Collector to allow credit if the stated conditions were met. Despite that line of authority, the Tribunal held that the controversy over the interpretation of the rule still involved a question of law and that there was no pronouncement by a superior forum on the issue.

Conclusion: A referable question of law was held to arise, and the question was directed to be forwarded to the High Court.

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