Modvat credit on capital goods cannot be denied solely for delayed declaration where no restrictive time-limit applies.

Modvat credit on capital goods could not be denied merely because the declaration was filed after the period relied on by Revenue, where the governing provision did not prescribe a restrictive time-limit and the Board's clarificatory circular indicated that the amendment concerned duty-paid documents rather than capital goods credit. The assessee's claim was therefore accepted for reconsideration, and the matter was remitted for fresh examination and grant of Modvat benefit in line with the circular.

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Issues: Whether Modvat credit on capital goods could be denied solely because the declaration was filed after three months from receipt of the goods, and whether the assessee was entitled to re-examination of the claim in light of the Board's circular.

Analysis: The dispute turned on the availability of Modvat credit in respect of capital goods under the relevant Central Excise Rules. The order noted that the Board's clarificatory Circular No. 199/33/96-CX. stated that the limitation introduced by Notification No. 28/95-C.E. (N.T.) and the amendment to Rule 57G related to duty-paid documents and did not impose a rigid time-limit for capital goods credit. The order also treated the absence of any specific restriction in the capital goods provision as significant and followed the view that credit should not be denied merely on the ground that the declaration preceded or followed the formal filing in the manner alleged by Revenue.

Conclusion: Denial of Modvat credit on the sole ground of delayed declaration was not justified, and the assessee's claim was accepted for reconsideration.

Final Conclusion: The matter was sent back for fresh examination and grant of Modvat benefit in accordance with the Board's clarification.

Ratio Decidendi: Where the governing capital goods provision does not prescribe a restrictive time-limit, Modvat credit cannot be denied merely because the declaration was filed after the period relied upon by Revenue, especially when the Board's clarificatory circular supports eligibility.

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