Modvat credit cannot be denied for non-entry in the register when inputs were actually used in manufacture.

Modvat credit could not be denied solely because input credit particulars were not entered in RG 23A Part I register where the inputs were in fact used in manufacturing the finished product. The omission was only a procedural infraction, and the rules did not permit denial of credit on that ground alone when the substantive condition of utilisation in manufacture was satisfied. The credit denial was therefore unsustainable and was set aside in favour of the assessee.

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Issues: Whether Modvat credit could be denied merely because the particulars of input credit were not entered in RG 23A Part I register, when the inputs were used in the manufacture of the finished product.

Analysis: The denial of credit was founded only on the omission to make the requisite entry in the register. The record did not support the allegation that the inputs were not utilised in the manufacture of the finished product. The failure was a procedural infraction, and the rules did not provide for denial of credit on that ground alone when the substantive requirement of utilisation in manufacture was satisfied.

Conclusion: The denial of Modvat credit was unsustainable and was set aside in favour of the assessee.

Ratio Decidendi: Modvat credit cannot be denied solely for non-entry in the prescribed register if the inputs have in fact been used in the manufacture of the final product.

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