Modvat credit on capital goods: brief declaration delay was condoned under Rule 57T, making the credit admissible.

Rule 57T governing the newly introduced Modvat scheme for capital goods allowed the Assistant Commissioner to condone delay in filing the declaration where sufficient cause was shown. Because the credit was taken in the transition period soon after the provision came into force and the declaration was filed shortly afterwards with only a brief delay, the delay was treated as explainable and within the scope of the rule's relaxation power. The Modvat credit on capital goods was therefore held admissible in favour of the assessee.

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Issues: Whether the delay in filing the declaration under Rule 57T could be condoned and the Modvat credit taken on capital goods was admissible.

Analysis: Rule 57T, as applicable to the newly introduced Modvat scheme for capital goods, permitted the Assistant Commissioner to condone delay where the declaration was filed within the prescribed period and sufficient cause was shown. The credit had been taken in the transition period soon after the new provision came into force, and the declaration followed shortly thereafter with only a brief delay. The delay was explained, and the rule itself contemplated relaxation in such circumstances.

Conclusion: The delay was condoned and the Modvat credit was held to be admissible in favour of the assessee.

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