Modvat credit cannot be denied for non-filing of Rule 57G declaration when duty is demanded later on prior duty-free clearances.

Modvat credit could not be denied merely because the declaration under Rule 57G was not filed where duty was demanded later for clearances made without payment of duty. The Tribunal applied earlier decisions and held that, in such circumstances, the assessee could not have filed the declaration at the relevant time because the goods had already been cleared duty-free. Non-filing of the declaration was therefore no valid ground to refuse credit, and the assessee was entitled to the Modvat benefit.

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Issues: Whether Modvat credit could be denied merely because the declaration under Rule 57G of the Central Excise Rules, 1944 was not filed when duty was demanded subsequently on clearances made without payment of duty.

Analysis: The Tribunal noted that the issue was settled by earlier decisions holding that where duty is demanded after the clearances, the assessee could not have filed the declaration for availing Modvat credit at the relevant time because the goods had been cleared without payment of duty. The earlier authorities were treated as controlling, including the decision on similar facts involving Tor Steel and the same period of clearance. On that basis, non-filing of the declaration was held to be no ground to deny the credit.

Conclusion: Modvat credit could not be denied solely on the ground that a declaration under Rule 57G was not filed. The objection of the Revenue failed, and the assessee was entitled to the benefit of credit.

Ratio Decidendi: Where duty is demanded subsequently in respect of clearances made without payment of duty, Modvat credit cannot be refused merely for non-filing of the Rule 57G declaration, since such declaration could not have been filed at the relevant time.

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