Modvat credit cannot be denied for a technical register lapse when duty-paid inputs are otherwise duly recorded.

Modvat credit was sustained despite non-maintenance of the prescribed RG-23A/I register because the assessee had recorded the relevant particulars in other registers, and receipt and consumption of duty-paid inputs were reflected in those records without defect. The High Court treated the missing register as a technical lapse, not a substantive ground to deny credit, and held that the Tribunal's view rested on findings of fact. No question of law arose for reference under Section 35H(1) of the Central Excise Act, 1944, so the Revenue's reference petition failed.

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Issues: Whether the Tribunal erred in allowing Modvat credit despite non-maintenance of the prescribed RG-23A/I register and whether such facts gave rise to a question of law warranting reference under Section 35H(1) of the Central Excise Act, 1944.

Analysis: The Tribunal found that the assessee had maintained the relevant particulars in other records, that the receipt and consumption of the duty-paid input were duly reflected, and that the Revenue found no defect in those records. On those findings, the omission to maintain one register was treated as a technical lapse only. The High Court held that the Tribunal's conclusion was based on findings of fact and that, in the circumstances, the Modvat credit claim could not be denied on a purely technical ground.

Conclusion: No question of law arose from the Tribunal's order, and the Revenue's reference petition failed.

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