Modvat credit cannot be denied for a delayed Rule 57G declaration when inputs were duty-paid and no prejudice was shown.

Modvat credit could not be denied merely because the Rule 57G declaration was filed after credit was taken, where receipt of duty-paid inputs and their use in manufacture were undisputed. The delayed filing was treated as a procedural and unintentional lapse, and no prejudice to the department was shown. On that basis, the technical breach was rightly ignored and the assessee was allowed to retain the credit.

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Issues: Whether Modvat credit could be denied merely because the declaration under Rule 57G was filed after availing the credit and some credit was taken on the same date as the invoices were issued.

Analysis: The receipt of duty-paid inputs and their use in the manufacture of final products was not in dispute. The lapse in filing the declaration before availing credit was treated as procedural and unintentional, and there was no prejudice shown to the department. In such circumstances, the appellate authority was justified in overlooking the technical breach and allowing the credit.

Conclusion: Modvat credit was not liable to be disallowed for the procedural lapse, and the assessee was entitled to retain the credit.

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