MODVAT credit allowed where chapter-heading description and actual use in manufacture satisfied declaration requirements.

MODVAT credit was held admissible where the declaration described the input as "Molybdenum" but the goods received were Molybdenum scrap or wire scrap, because both fell within the same Chapter 81 and the notification operated on a chapter-heading basis. The declaration mentioned the relevant chapter heading, and departmental clarification supported deciding such cases on merits where broad descriptions and chapter details were filed and the inputs were shown to have been received and used in manufacture. As the Revenue did not dispute actual use of the inputs, the description was treated as sufficient compliance with the rule requirements, and disallowance of credit was not justified.

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Issues: Whether MODVAT credit was admissible where the declaration described the input as "Molybdenum" but the goods received were Molybdenum scrap or wire scrap, and whether the declaration complied with the requirements of the MODVAT notification and rules.

Analysis: The input and the scrap fell within the same Chapter 81, and the notification operated on a chapter-heading basis. The declaration had mentioned the relevant chapter heading, and the departmental clarification indicated that past cases could be decided on merits where broad descriptions and chapter details were filed and the inputs were shown to have been received and used in the manufacture of the final product. Since the Revenue did not dispute actual use of the inputs in manufacture, the description supplied in the declaration was treated as adequate compliance with the relevant rule requirements.

Conclusion: The declaration was sufficient for availing MODVAT credit, and disallowance of credit was not justified. The Revenue's appeal failed.

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