Modvat credit claim to be considered on merits in fresh adjudication despite no Rule 57G declaration

The dispute was remanded for de novo adjudication because the earlier proceedings had not properly examined the effect of the proposed reclassification of the goods and the linked claim to Modvat benefit. Fresh consideration on merits was required, with an opportunity of personal hearing. The authorities were directed to consider the Modvat credit plea in the remand proceedings and not reject it merely because no declaration under Rule 57G had been filed at the time the inputs were received.

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Issues: Whether the appeal should be remanded for de novo decision on merits, with an opportunity of personal hearing, and whether the appellants could raise the plea of Modvat credit without being denied consideration merely for want of declaration under Rule 57G.

Analysis: The matter had not been properly examined in the earlier proceedings, particularly on the effect of the proposed reclassification of the goods and the consequential claim to Modvat benefit. As the position required fresh consideration on merits, the dispute was sent back for a de novo decision after giving the appellants an opportunity of personal hearing. The authorities were also directed to consider any plea for Modvat credit on merits in the remand proceedings, without rejecting it solely on the ground that no declaration under Rule 57G had been filed at the time of receipt of the inputs.

Conclusion: The appeal was remanded for fresh adjudication on merits, and the appellants were permitted to raise the Modvat credit claim in the de novo proceedings.

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