Modvat credit cannot be denied for incomplete declaration where duty-paid inputs were received and used in manufacture.

Modvat credit could not be denied merely because the declaration was not filed or was incomplete where the inputs were duty-paid, received in the factory and used in manufacture. Rule 57G(11) barred denial of credit for procedural defects in the declaration if the jurisdictional authority was satisfied that duty had been paid on the inputs and that they were actually used or intended for use in final products. On that basis, the earlier reversal of credit for non-filing of declaration was held incorrect for the relevant period, and the assessee remained entitled to the credit.

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Issues: Whether Modvat credit could be denied merely because the declaration was not filed or was incomplete, when the inputs were duty-paid, received in the factory, and used in manufacture.

Analysis: Rule 57G(11) of the Central Excise Rules, as amended, provided that credit shall not be denied merely because the declaration did not contain all particulars or because the manufacturer failed to comply with requirements under sub-rule (1), provided the jurisdictional authority is satisfied that duty on the inputs has been paid and that the inputs have actually been used or are to be used in the manufacture of final products. The Tribunal noted that the inputs in question were imported on duty-paid documents, their receipt and consumption were not in dispute, and the earlier reversal of credit on the ground of non-filing of declaration was legally incorrect for the relevant period.

Conclusion: Denial of Modvat credit was not justified; the assessee was entitled to the credit notwithstanding the procedural lapse in declaration.

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