Substantial compliance under Modvat rules prevented denial of credit for missing separate declaration under Rule 57G.

Modvat credit could not be denied for failure to file a separate declaration under Rule 57G where the assessee had filed classification lists referring to the Modvat scheme and supplied material showing the inputs and finished products. The record showed substantial compliance: the scheme had recently been introduced, the department was aware of the inputs and end-product through correspondence, RT 12 returns had been assessed, and no separate declaration requirement had been specifically pointed out. On those facts, the procedural lapse did not justify denial of credit.

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Issues: Whether Modvat credit could be denied for non-filing of a separate declaration under Rule 57G of the Central Excise Rules when the assessee had filed classification lists referring to the Modvat scheme and had otherwise furnished material showing the inputs and final products.

Analysis: Rule 57G required a declaration for availing Modvat benefit, but the record showed that the scheme had just been introduced, the assessee had filed classification lists with an endorsement under the Modvat scheme, correspondence with the department disclosed the inputs and end-product, RT 12 returns had been assessed, and no separate declaration requirement had been pointed out. On these facts, the filing of the classification list and accompanying material amounted to substantial compliance, and the denial of credit on a purely procedural lapse was not justified.

Conclusion: Modvat credit could not be denied to the assessee on the ground of non-filing of a separate declaration under Rule 57G.

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