Modvat credit cannot be denied for technical defects in declaration where duty-paid input use is undisputed.

Modvat credit on aluminium foil sheets was not to be denied merely because the declaration under Rule 57G did not describe the input with exact specificity, where the declaration substantially covered aluminium foil board packets and the goods were used as packing tucks for the final product. The duty-paid character of the input and its use in relation to the final product were undisputed, so the omission was treated as a technical defect rather than a substantive bar. On that basis, denial of credit on the ground of non-specific declaration was unsustainable, and the assessee's credit claim was allowed.

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Issues: Whether Modvat credit on aluminium foil sheets was deniable merely because the sheets were not specifically described in the declaration filed under Rule 57G, when the declarations referred to aluminium foil board packets and the goods were used as packing tucks for the final product.

Analysis: The declarations filed with the department described the input as packets of aluminium foil board, and the record showed that the foil sheets were converted by job workers into tucks used for packing razor blades. The eligibility of the aluminium sheets for Modvat credit had already been accepted in the assessee's favour. In these circumstances, the absence of a more specific description of the foil sheets in the declaration was treated as a technical defect. The denial of credit on that basis was held unsustainable because the duty-paid nature of the goods and their use in relation to the final product were not in dispute.

Conclusion: Modvat credit could not be denied on the ground of non-specific declaration, and the issue was decided in favour of the assessee.

Final Conclusion: The demand was set aside and the assessee was held entitled to the Modvat credit claim.

Ratio Decidendi: Where the duty-paid input and its use in relation to the final product are undisputed, Modvat credit cannot be denied merely for want of a more specific description in the declaration if the declaration substantially covers the input.

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