Judgment :- R. JAYASIMHA BABU, J. The question referred is as to whether Rule 57B of the Central Excise Rules as it existed in the year 1991 is applicable in respect of the inputs lying in stock at the time the manufacturer obtained acknowledgement of declaration made under Rule 57B. 2.The assessee is a manufacturer of paints and varnishes which fall under Chapter XXXII of the Central Excise Tariff, 1985. During the financial year 1991-92 after availing full basic exemption upto NIL rate under the Notification No. 175/86 the assessee filed declaration under Rule 57G and opted for Modvat Scheme on 12-8-1991. The assessee also claimed transitional credit of Rs. 4, 45, 460/- and Rs. 20, 499/- under Rule 57B in respect of the stock on inputs held by them as on 12-8-1991. That claim though initially allowed was subsequently rejected by the Asstt. Collector. Collector having allowed the appeal of the assessee, the matter was carried to the Tribunal which even while correctly expending the object and scope of Section 57B, ultimately held that the assessee was not entitled to the transitional credit under S. 57B. The Tribunal took the view that Rule 57B is inapplicable for the purpose of determining the transitional credit under Rule 57B. The Tribunal took the view that Rule 57B is inapplicable for the purpose of determining the transitional credit under Rule 57B. 3.Rule 57B as it stood at the relevant time, reads as under :- "Rule 57B credit of duty in respect of inputs obtained from Small Scale manufacturers :- Notwithstanding anything contained in rule 57A credit of specified duty or inputs may, in a case where the duty on inputs has been paid under a Notification issued under sub-rule (1) of Rule 8 or Sub-Section (1) of Section 5A of the Act or Section 5A of the Act, as the case may be exempting such inputs from a part of the duty leviable thereon on the basis of value of clearances of such inputs during any specified period, be allowed at the rate otherwise applicable to such inputs but for the said notification.Provided that the said notification provides for grant of credit in respect of such inputs at such higher rates as may be specified therein." 4.The credit at the rate at which the duty would have been payable though not actually, paid by the manufacturer on inputs by reason of the manufacturer being a small scale industry, is to be allowed to the purchase of such inputs, who uses the input in the manufacture of other excisable products, not-withstanding the fact that under Rule 57A the duty allowable as credit, is the duty paid on the goods used in the manufacture of the final product. Rule 57H after giving it over-riding effect in relation to 57G states the procedure to be observed by the manufacturer for obtaining Modvat credit and empowers the Asstt. Collector to allow "credit of duty paid on inputs received by the manufacturer immediately before obtaining the acknowledgment of the declaration, subject to the conditions set out in the Rule". 5.R. 57A does not unfortunately for the assessee give it over-riding effect on Rule 57H as a whole. Had 57B not been a part of Rules, credit could have been taken only for the amount of duty actually paid as provided for in Rule 57A. Rule 57G permits the manufacturer of final product to take credit of the duty on the inputs received by him. Only after he obtains acknowledgment of the declaration required to be made under Rule 57G. Rule 57G permits the manufacturer of final product to take credit of the duty on the inputs received by him. Only after he obtains acknowledgment of the declaration required to be made under Rule 57G. Rule 57H deals with the period, anterior to the date of obtaining of the acknowledgment of declaration. For that period, at the discretion of the appropriate officer, credit may be allowed on the inputs lying in stock to the extent of the duty paid on the inputs. Rule 57B is not made applicable to the amount of credit that the manufacture may avail of in respect of the inputs lying in stock prior to the date of filing of the declaration and obtaining acknowledgment. 6.The submission of the learned Counsel for the assessee that in the absence of any provision in 57H to exclude the applicability of R. 57B, the latter rule should be read into the former as untenable and has to be rejected. The rule making authority has made a conscious distinction with regard to the quantum of credit to be allowed on the inputs obtained from Small-scale manufacturers keeping in view, the time at which the inputs manufactured by such small scale manufacturers were acquired by the assessee. In cases where the assessee had acquired the inputs even prior to the date of declaration, the fact that a higher rate of credit could be availed of under R. 57B, subsequent to the declaration could not be regarded as having in any way affected the earlier acquisition of the inputs manufactured by such small scale industries. The assessee, prior to the filing of the declaration acquired inputs and at the time, the inputs were acquired, it could not have envisaged that at some point of time, in the future they would become entitled to the benefit by setting off the duty otherwise payable but not paid on those inputs against the duty which the assessee would have to pay on the final product. The decision to obtain goods from the Small scale manufacturer was at the time it was acquired, not in any way influenced by the existence of Rule 57B. The decision to obtain goods from the Small scale manufacturer was at the time it was acquired, not in any way influenced by the existence of Rule 57B. The Rule Making authority has therefore while allowing the credit to be taken for the duty paid on inputs, which was lying in stock at the time of the filing of the declaration has limited the credit to the amount of the duty actually paid. 7.The true purpose of Rule 57B can be said to be served only when the manufacture of the final product is induced to buy the inputs from small scale manufacturers by reason of the opportunity provided by law to avail a higher amount of credit even while actually paying a lesser amount by reason of the inputs having been manufactured by the small scale manufacturers. Such decision would be made by the manufacturer of the final product only after he decides to avail of the Modvat scheme and makes the necessary declaration. Rule 57B therefore is not applicable in respect of the inputs lying in stock with the manufacturer of the final product at the time such manufacturer obtains the acknowledgment of the declaration made by him under Rule 57B. We therefore, answer the question referred to us in favour of the Revenue and against the assessee.