Modvat credit cannot be denied for belated declaration where eligibility is otherwise proved and no express time bar applies.

Modvat credit could not be denied merely because the Rule 57G declaration was filed after receipt of the inputs or because the credit was taken later, since the rules did not require prior receipt of inputs after declaration and eligibility was otherwise established on duty-paid records. The Tribunal also held that the claim was not barred by limitation because the credit was availed within a reasonable time after the duty position was settled. The assessee was therefore entitled to the credit, and the impugned order was set aside with consequential relief.

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Issues: Whether Modvat credit could be denied for inputs used in manufacture of final products where the declaration under Rule 57G was filed after the inputs had been received and the credit was taken later, and whether the availment of credit was barred by limitation.

Analysis: The relevant inputs were received and used when the appellants were under a valuation dispute and were not claiming Modvat on the footing that the goods did not form part of the final product. The declaration for availing Modvat on the disputed inputs was filed after the position was clarified, and the credit was taken subsequently on the basis of duty-paid records. The rules did not prescribe that inputs must necessarily be received only after filing of the declaration, and the Tribunal accepted that credit could be taken later so long as eligibility was otherwise established. On limitation, the credit was availed within a reasonable time after the duty position was settled.

Conclusion: Modvat credit could not be denied on the ground of the timing of the declaration or on limitation, and the appellants were entitled to the credit.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Where eligibility to Modvat credit is otherwise established, credit cannot be denied merely because the declaration was filed after receipt of inputs or because the credit was taken later, provided the claim is made within a reasonable time and the rules do not prescribe an express time bar.

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