Modvat credit cannot be denied for procedural defects when duty-paid inputs are received for manufacture and substantive requirements are met.

Modvat credit on imported inputs could not be denied merely for non-strict compliance with the declaration or intimation procedure, where the duty-paying document contained the essential particulars and the inputs were received for use in manufacturing final products. The absence of a date in the declaration was treated as a procedural defect only, not a substantive bar to credit. Rule 57G(11) was applied to reflect that credit should be allowed when substantive requirements are met and the Assistant Commissioner is satisfied about intended factory use of the inputs. The operative effect is that procedural imperfections alone do not justify denial of Modvat credit.

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Issues: Whether Modvat credit of additional duty of customs paid on imported inputs could be denied merely because the declaration or intimation to the customs authorities did not strictly comply with the prescribed procedural requirement.

Analysis: Credit under the Modvat scheme could not be refused when the duty-paying document contained the essential particulars and the goods were shown to have been received for use in the manufacture of final products. The mere absence of a date in the declaration intimating intention to avail credit was only a procedural imperfection. Rule 57G(11) reflected the principle that credit should not be denied where the substantive requirements were satisfied and the Assistant Commissioner was satisfied about intended use of the inputs in the factory.

Conclusion: The denial of credit was unjustified and the assessee was entitled to Modvat credit.

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