Transitional Modvat credit under Rule 57H was upheld despite later deletion of the facility.

Transitional Modvat credit under Rule 57H was admissible where the assessee had already filed the Rule 57G declaration and exercised the relevant option contemporaneously. The scheme was treated as beneficial in character, so the later deletion of the facility could not be applied to defeat an entitlement already in motion. The later restoration of the deleted portion of Rule 57H also supported the broader reading of the provision. The assessee's claim was therefore upheld.

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Issues: Whether transitional Modvat credit under Rule 57H was admissible on the facts, and whether the amendment deleting that facility could defeat the assessee's claim.

Analysis: The claim for transitional credit was examined with reference to the date of the declaration under Rule 57G and the contemporaneous option exercised by the assessee. The reasoning treated the Modvat scheme as beneficial in character and accepted that the relevant entitlement had to be understood in light of the declaration already filed, rather than by applying the later deletion in a manner that would deny the facility. The subsequent restoration of the deleted portion of Rule 57H also supported the broader construction adopted below.

Conclusion: Transitional Modvat credit was admissible, and the assessee's claim was upheld.

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