Modvat credit cannot be denied for minor mismatch in description, classification, or make when substantive eligibility is otherwise established.

Modvat credit could not be denied where the goods were duty paid, used in the factory as capital goods, and otherwise satisfied the statutory definition. A discrepancy in the declaration or invoices relating only to classification, description, or make was treated as a minor defect that did not affect substantive eligibility. On that basis, the credit remained allowable and denial solely for such mismatch was unsustainable.

---

---

Issues: Whether Modvat credit could be denied merely because the declaration contained an incorrect classification or description of the capital goods and the make of the goods received differed from the make mentioned in the declaration.

Analysis: The basic requirements for Modvat credit were that the goods were duty paid, used in the factory as capital goods, and covered by the relevant definition of capital goods. The record showed that these conditions were satisfied. The discrepancy related only to the description, classification, and make of the goods in the declaration and invoices. Such variation was held to be a minor one which did not affect the substantive eligibility for credit.

Conclusion: Modvat credit could not be denied on account of the minor variation in description, classification, or make, and the credit was allowable to the assessee.

Final Conclusion: The denial of credit was unsustainable because substantive eligibility as duty paid capital goods was established notwithstanding the defect in declaration.

Ratio Decidendi: Where duty paid goods are used as capital goods and satisfy the statutory definition, Modvat credit cannot be refused solely for a minor mismatch in description, classification, or make in the declaration or invoices.

---