Transfer of unutilised input credit under Rule 57H(3) allowed on switch from Rule 56A to Rule 57A.

Rule 57H(3) was construed to permit transfer of unutilised duty credit on inputs received before the switch from Rule 56A to Rule 57A, subject to the prescribed conditions for specified inputs and final products. The provision was read according to its clear wording as allowing the credit lying in RG 23 to be carried into RG 23A, and the department's narrower view that the credit was confined to stock in a particular register was rejected. The manufacturer was entitled to take the credit.

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Issues: Whether, on switching over from Rule 56A to Rule 57A, the manufacturer was entitled under Rule 57H(3) to transfer and avail the unutilised credit lying in account in respect of duty paid on inputs received before the change.

Analysis: Rule 57H(3) permitted a manufacturer who had been availing the earlier special procedure under Rule 56A, or credit on duty-paid materials or component parts, to transfer the duty credit on materials or component parts received before the commencement of the amendment and lying unutilised in RG 23 to RG 23A, subject to the prescribed condition regarding specified inputs and final products. The provision was construed according to its clear wording as authorising transfer of the unutilised credit, and the department's restrictive view that the credit was confined to stock lying in a particular register was not accepted.

Conclusion: The appellant was entitled to take the credit in question.

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