Modvat credit barred where Rule 57G declaration was filed after receipt of inputs without delay condonation

Modvat credit under Rule 57G required a declaration to be filed before taking credit, with acknowledgement from the Assistant Commissioner, and delayed filing was permitted only if delay was condoned by a reasoned order on sufficient cause. Where the declaration was filed after receipt of the inputs and no request for condonation of delay was made, the credit was not admissible. The demand and penalty were therefore sustained.

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Issues: Whether Modvat credit could be availed when the declaration under Rule 57G was filed after receipt of the inputs and no condonation of delay was sought.

Analysis: Rule 57G(1) required a manufacturer intending to take credit of duty on inputs to file a declaration before the Assistant Commissioner and obtain acknowledgement. Under Rule 57G(2), credit could be taken only after such acknowledgement. The filing requirement was mandatory, and Rule 57G(9) permitted delayed declaration only where sufficient reasons existed and the Assistant Commissioner condoned the delay by a reasoned order. In the present case, the declaration was filed long after the inputs were received, and no application for condonation of delay was made.

Conclusion: Modvat credit was not admissible. The demand and penalty were rightly confirmed, in favour of the Revenue.

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