Modvat credit eligibility on inputs and capital goods cannot be denied on a mere declaration defect where substantive conditions are met.

Modvat credit was treated as admissible on lubricants, electrodes, P.M. Shafts and disinfectants because the items were covered by the cited Larger Bench decisions and satisfied the substantive eligibility conditions. Electrodes were accepted as capital goods, and the objection based on non-filing of declaration for P.M. Shafts and disinfectants was not upheld where the necessary particulars were available and the prevailing legal position and departmental circular supported credit. The disallowance and penalty were therefore not sustainable, with consequential relief following in accordance with law.

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Issues: Whether Modvat credit was admissible on lubricants, electrodes, P.M. Shafts and disinfectants, and whether denial of credit and penalty could be sustained.

Analysis: The items in dispute were held to be covered by the cited Larger Bench decisions. Lubricants were treated as admissible for Modvat credit, electrodes were held eligible as capital goods, and the objection based on non-filing of declaration for P.M. Shafts and disinfectants was not accepted in view of the prevailing legal position and the departmental circular, where the necessary particulars were available.

Conclusion: Modvat credit was held admissible on all four items and the disallowance could not be sustained.

Final Conclusion: The appeal succeeded and the assessee became entitled to consequential relief in accordance with law.

Ratio Decidendi: Where the substantive conditions for Modvat credit are satisfied, credit cannot be denied merely on the basis of a procedural objection such as non-filing of declaration.

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