Modvat credit cannot be denied for a mere misdescription in declaration when tariff classification and duty payment are correctly disclosed.

Modvat credit should not be denied merely because the Rule 57G declaration misdescribed the input as re-rollable scrap instead of ribbed bars, where the correct tariff heading was stated, the goods were duty paid, and the inputs were otherwise eligible under the Modvat scheme. A description error of this kind is treated as a curable technical irregularity, not a defect going to the root of entitlement, particularly when the goods were used in manufacture and the classification was otherwise correctly disclosed. The denial of credit on this basis was therefore unsustainable.

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Issues: Whether Modvat credit could be denied merely because the declaration under Rule 57G described the input as re-rollable scrap instead of ribbed bars, where the correct tariff heading was given, the inputs were duty paid, and the inputs and final products were otherwise covered by the Modvat scheme.

Analysis: The input goods were received from SAIL and were used in the manufacture of the final products. The declaration contained the correct tariff heading and the duty-paid nature of the inputs was not in dispute. The description error was treated as a technical irregularity rather than a defect going to the root of entitlement, especially since the goods were defective bars capable of being regarded as re-rollable scrap. The trade notice relied upon supported the view that credit should not be denied where the classification was correctly declared and duty had been paid under the correct classification.

Conclusion: Modvat credit could not be denied on the basis of the description error, and the denial was unsustainable. The issue is decided in favour of the assessee.

Final Conclusion: The order denying Modvat credit was set aside and the appeal succeeded.

Ratio Decidendi: Where the correct tariff classification is disclosed, the input is duty paid, and the goods are otherwise eligible under the Modvat scheme, a mere misdescription of the input in the declaration is a curable technical error and does not justify denial of credit.

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