Modvat credit on duty-paid inputs cannot be denied for a declaration-form defect where the inputs were duly covered and duty was paid.

Modvat credit could not be denied merely because the declaration was not filed in a prescribed form or before receipt of the inputs, where the declaration covered the six inputs and no prohibition existed against including exempted inputs. Credit was admissible because the six inputs were received on duty-paid invoices after 1-4-86, and the governing requirement was payment of duty on the inputs. Denial of credit solely on the declaration defect was therefore unsustainable, and credit on the six duty-paid inputs remained admissible.

---

---

Issues: Whether Modvat credit could be denied on the six inputs on the ground that the declaration was not filed in the prescribed form or prior to receipt of the inputs, and whether credit was admissible on duty-paid invoices for those inputs.

Analysis: The declaration filed by the assessee covered the six inputs, and there was no prescribed proforma or prohibition against including exempted inputs in the declaration. The relevant requirement was that credit could be taken only when duty had been paid on the inputs, and the record showed that the six inputs were received on duty-paid invoices after 1-4-86. In these circumstances, the denial of credit solely on the basis of the declaration issue was not justified.

Conclusion: The credit on the six duty-paid inputs was admissible and the denial by the lower authorities was unsustainable, in favour of the assessee.

---