Modvat credit cannot be denied where prior declaration of the final product is evidenced by departmental acknowledgement.

Modvat credit could not be denied on the basis of alleged non-declaration where the record showed that the declaration dated 27-3-1986 had been filed before the jurisdictional office. The acknowledgement of the declaration, together with the subsequent receipt letter, established that steam had been declared as the final product. As the denial of credit rested solely on the alleged absence of declaration, that ground failed. The assessee was therefore entitled to Modvat credit, and the duty demand and penalty were set aside.

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Issues: Whether Modvat credit could be denied on the ground that the final product was not declared, when the assessee relied on an earlier declaration showing steam as the final product.

Analysis: The credit dispute turned entirely on whether the declaration dated 27-3-1986 had in fact been filed before the jurisdictional office. The acknowledgement of the declaration and the subsequent letter acknowledging receipt established that the declaration showing steam as the final product had been filed. Since denial of credit was based solely on alleged non-declaration, that basis could not survive.

Conclusion: The assessee was held entitled to Modvat credit, and the demand of duty and penalty were set aside.

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