Modvat credit transfer cannot be denied merely for lack of one-to-one correlation or a prescribed account format.

Rule 57H(3) was examined as a mechanism for transferring unutilised credit arising under an exemption notification into the Modvat account. The text states that, where the governing notification or rule does not require one-to-one correlation between inputs and final products or a particular account format, transfer of accumulated credit cannot be refused on that basis alone. It distinguishes the earlier view in Sirpur Paper Mills and notes that the contrary approach required reconsideration. The matter was sent for reconsideration before the President, so no final adjudication was made on entitlement.

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Issues: Whether credit accumulated under the exemption notification could be transferred to the Modvat account under Rule 57H(3) despite non-maintenance of one-to-one correlation and a particular account format.

Analysis: The order examines the object of Rule 57H(3), which is to permit transfer of unutilised credit arising under special procedures or exemption notifications. It notes that the exemption notification did not itself require maintenance of one-to-one correlation between inputs and final products, and that denial of transfer merely because a particular accounting form was not followed would be unjustified unless such a requirement was imposed by statute or the relevant rule. The order also distinguishes the earlier view in Sirpur Paper Mills and states that the issue needs reconsideration.

Conclusion: Transfer of credit could not be denied solely on the ground that the particular form of account was not maintained, and the contrary view was directed to be reconsidered.

Final Conclusion: The matter was sent for reconsideration before the President, so no final adjudication on the appellant's entitlement was made in this order.

Ratio Decidendi: Where the governing notification or rule does not mandate a particular accounting format or one-to-one correlation, transfer of accumulated credit cannot be refused on that basis alone.

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