Mandatory intimation for capital goods credit under Modvat rules treated as essential, so non-compliance defeats eligibility.

Modvat credit on capital goods was available only where the goods were used in the factory of production of final products, and the intimation requirement under Rule 57T(4) served to verify that substantive condition. Failure to intimate receipt of the capital goods to the jurisdictional Superintendent was treated as mandatory non-compliance, not a mere procedural defect, because it affected eligibility for credit. The denial of Modvat credit was therefore upheld.

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Issues: Whether Modvat credit on capital goods was admissible despite non-intimation of receipt of the capital goods to the jurisdictional Superintendent under Rule 57T(4).

Analysis: Credit under Rule 57Q was available only where the capital goods were used in the factory of production of final products. The intimation required under Rule 57T(4) was intended to enable the department to verify that this substantive requirement was satisfied. The failure to intimate receipt of the capital goods in the factory was not a minor procedural lapse, but a mandatory non-compliance affecting eligibility for credit.

Conclusion: The denial of Modvat credit was upheld and the appeal failed.

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