Modvat credit on packing material upheld despite an incorrect declaration, where amended rules and board guidance permitted the claim.

Modvat credit on polythene bags used as packing material was treated as admissible where the Board's circular permitted credit on packing material for final products chargeable at a specific rate of duty. An incorrect declaration under Rule 57G did not, by itself, bar the claim after amendment of the rule, so the credit claim was allowed in favour of the assessee.

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Issues: Whether Modvat credit was admissible on polythene bags used as packing material, notwithstanding the incorrect declaration.

Analysis: The credit claim on polythene bags was held allowable because the Board's circular permitted Modvat credit on packing material where the final products were chargeable to a specific rate of duty. The defect in filing an incorrect declaration did not, by itself, bar the claim in view of the amended provisions of Rule 57G of the Central Excise Rules.

Conclusion: Modvat credit on polythene bags was held admissible in favour of the assessee.

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