Modvat credit declarations: procedural omission could not defeat credit without considering condonation of delay

Credit under Rule 57G could not be denied solely because the initial declaration omitted the relevant input classification, where a later declaration was filed shortly afterwards to cure the omission. Rule 57G(5) gave the Assistant Commissioner power to condone procedural delay and allow credit if the statutory conditions were satisfied, so the authority had to consider that discretion and record reasons before refusing relief. A procedural lapse was therefore not treated as fatal without examination of the condonation power, and the credit was held to be admissible.

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Issues: Whether credit under Rule 57G could be denied merely because the declaration did not initially mention the relevant input classification and whether the authority was required to consider condonation of the delay under Rule 57G(5).

Analysis: The declaration under Rule 57G(1) mentioned one category of inputs but omitted the mis-rolls on which credit had been taken. A later declaration was filed within a short time to rectify the omission. Rule 57G(5) empowered the Assistant Commissioner to condone the delay and allow credit where the procedural requirements had not been complied with, subject to satisfaction on the statutory conditions. The order rejecting credit did not show that this discretion had been examined with reference to the proviso or that reasons were recorded for refusing to exercise it. In such circumstances, the procedural lapse could not be treated as fatal without consideration of the statutory power to condone delay.

Conclusion: The denial of credit was unsustainable and the appellant was entitled to the impugned credit.

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