Modvat credit cannot be denied for a technical document lapse where there is no allegation of misuse.

Modvat credit was treated as unavailable only for substantive defects, not for a merely procedural lapse in the supporting documents. The absence of the required endorsement or declaration under Rule 57G was regarded as technical, particularly where the bills of entry related to the initial period after Modvat was introduced and there was no allegation of misuse of credit. On that basis, the procedural omission did not defeat the underlying entitlement to credit, and the allowance of Modvat credit was upheld.

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Issues: Whether Modvat credit could be denied on the ground that the documents were not valid and the declaration requirement under Rule 57G(2)(1) was not strictly complied with.

Analysis: The omission was held to be technical in nature. The relevant bills of entry were issued around the initial period after introduction of Modvat, and there was no allegation of misuse of the credit. The absence of the required endorsement or declaration was treated as a procedural lapse rather than a defect defeating the substantive entitlement to credit.

Conclusion: Modvat credit could not be denied for the procedural lapse, and the order allowing credit was upheld. The Revenue's appeal was dismissed.

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