Modvat credit begins only after valid declaration; pre-declaration inputs and stock relief fail without prescribed procedure.

Modvat credit was available only from the date of a valid declaration under the scheme, so inputs received before that declaration did not qualify. Transitional relief for stock inputs could be claimed only through the prescribed procedure, and no such request was made. The denial of credit for the pre-declaration period was therefore upheld, and no further relief was available in respect of inputs lying in stock.

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Issues: Whether the appellant was entitled to Modvat credit for inputs received before filing the declaration under the Modvat scheme and whether any relief was available in respect of inputs lying in stock without recourse to the prescribed procedure.

Analysis: The appellant was operating under the small scale industry exemption and was not under licensing control until the L4 licence was granted. The declaration for availing Modvat benefit was filed only on 4-10-1990, and the entitlement to credit could not arise before that date. As regards inputs in stock on the date of declaration, no request was made for consideration under the special transitional procedure prescribed for such goods.

Conclusion: The appellant was not entitled to Modvat credit prior to 4-10-1990, and no further relief was available in respect of stock inputs. The finding was against the assessee.

Final Conclusion: The order denying Modvat credit for the period before the declaration was upheld and the appeal failed.

Ratio Decidendi: Modvat credit becomes available only from the date of valid declaration under the scheme, and transitional relief for pre-declaration stock inputs must be claimed under the prescribed procedure.

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