Modvat credit cannot be denied for late declaration filing or delayed acknowledgement when compliance is otherwise substantive.

Modvat credit could not be denied merely because the declaration for capital goods was filed after installation, where the verification requirement had already been withdrawn and the delay was only a matter of timing. Credit also could not be refused for want of formal or timely acknowledgement by the proper officer, because a belated departmental acknowledgement was treated as relating back to the filing date and delayed action could not defeat entitlement. The governing principle applied was that, once the relevant requirement is withdrawn or substantially complied with, procedural delay in filing or acknowledgement does not by itself disentitle the assessee from credit.

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Issues: (i) whether Modvat credit could be denied on the ground that intimation or declaration relating to capital goods was filed after installation of the goods; (ii) whether credit could be denied for want of formal or timely acknowledgement of the declaration by the proper officer.

Issue (i): whether Modvat credit could be denied on the ground that intimation or declaration relating to capital goods was filed after installation of the goods.

Analysis: The verification requirement had already been withdrawn, and the declaration was filed after installation only as a matter of timing. The relevant administrative circular and prior tribunal authority supported the view that post-installation filing of intimation did not by itself disentitle the assessee from credit.

Conclusion: Modvat credit could not be denied on this ground, and the finding was in favour of the assessee.

Issue (ii): whether credit could be denied for want of formal or timely acknowledgement of the declaration by the proper officer.

Analysis: The declaration had been filed and remained unacknowledged for a long period, and a belated acknowledgement was treated as relating back to the date of filing. The absence of a dated acknowledgement by the department could not be used to penalise the assessee, and delayed departmental action could not defeat the credit entitlement.

Conclusion: Credit could not be denied for absence of formal acknowledgement, and the finding was in favour of the assessee.

Final Conclusion: The Revenue's challenge to the grant of Modvat credit failed, and the order allowing credit was sustained.

Ratio Decidendi: Where the governing requirement has been withdrawn or substantially complied with, Modvat credit cannot be denied merely because the declaration was filed after installation of capital goods or because the department delayed formal acknowledgement of the declaration.

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