Modvat credit for job-work inputs denied where duty payment and Rule 57G documentation were not proved.

Modvat credit on PU foam used through a job worker was not admissible because the prescribed Rule 57G declaration and documentary proof of duty payment on the inputs were not produced. The finished seats were received under gate passes showing nil duty, and the record did not establish that the PU foam had been sent directly to the job worker with evidence of duty-paid purchase. As the statutory and procedural conditions for credit were not satisfied, the disallowance was upheld.

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Issues: Whether Modvat credit on PU foam could be allowed when the goods were sent to a job worker and the finished seats were received under gate passes showing nil duty, without proof that the inputs were duty paid and without the prescribed declaration and accompanying documents.

Analysis: The appellants claimed credit in respect of PU foam used for manufacture of motor vehicle seats on job work basis. The governing procedure required a declaration under Rule 57G and documentary evidence showing payment of duty on the inputs used in the intermediate product. The record did not show that the PU foam had been purchased and sent directly to the job worker with proof of duty payment, nor was any declaration filed before the Tribunal. Since the seats were received under gate passes indicating nil duty, and there was no evidence that the inputs were duty paid, the conditions for taking credit were not satisfied.

Conclusion: The credit was not admissible and the disallowance was upheld; the appeal failed.

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