Modvat credit cannot be refused merely for missing declaration where duty-paying documents establish eligibility and verification is possible.

Modvat credit cannot be denied solely because the assessee failed to file the declaration where duty-paying documents otherwise establish eligibility. The Tribunal reiterated that non-payment of duty on clearance, by itself, does not justify of credit if supporting records are available for verification. The existing findings on clandestine removal, duty demand and penalty were left undisturbed, but the assessee remained entitled to Modvat credit subject to verification of the relevant documents.

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Issues: Whether Modvat credit could be denied solely because the assessee had not filed the declaration, despite maintenance of duty-paying documents and notwithstanding the finding of clandestine removal and confirmation of duty and penalty.

Analysis: The appeal challenged only the grant of Modvat benefit. The order under challenge had already confirmed the demand and penalty on the clandestine removal charge, but had directed verification of duty-paying documents for allowing Modvat credit. The Tribunal followed its consistent view that the benefit of Modvat credit cannot be denied merely because the goods were removed without payment of duty or because the declaration was not filed, and relied on the principle affirmed by the Supreme Court in Formica India Division. The availability of supporting documents and eligibility to credit were treated as sufficient for verification and grant of the benefit.

Conclusion: Modvat credit could not be denied on the sole ground of non-filing of declaration, and the Revenue's challenge failed.

Final Conclusion: The demand and penalty findings were unaffected, but the assessee remained entitled to Modvat credit subject to verification of duty-paying documents.

Ratio Decidendi: Modvat credit cannot be refused merely for non-compliance with the declaration requirement where the duty-paying documents establish eligibility, even if the goods were cleared without payment of duty.

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