Substantial compliance with Modvat declaration requirements prevents denial of credit where departmental records disclose the final product and process.

Modvat credit could not be denied solely for absence of a formal Rule 57G declaration where the assessee had disclosed the final product in the classification list and obtained departmental permission under Rule 57F(2). Those records showed that the department knew the inputs, the final product, and the intended manufacturing process, so the declaration requirement was substantially complied with. Credit was therefore admissible and the denial was set aside.

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Issues: Whether Modvat credit could be denied for want of a formal declaration under Rule 57G when the assessee had disclosed the final product in the classification list and had also obtained departmental permission under Rule 57F(2).

Analysis: The assessee had indicated in the classification list that it would avail Modvat credit on stainless steel flats and had also sought and obtained permission to send goods to job workers for manufacture of flats. Read together, these documents showed that the department was aware of the final product and the intended use of the inputs. The requirement of declaration was therefore held to have been substantially complied with. The reliance placed on the cited decisions was distinguished because, in those cases, there was either no comparable disclosure or the declaration was necessary for verification in the context of the exemption claimed.

Conclusion: Modvat credit was admissible to the assessee and the denial of credit was set aside.

Ratio Decidendi: Where the assessee has made a clear disclosure of the final product in departmental records and obtained permission reflecting the same manufacture, the declaration requirement for Modvat purposes is satisfied by substantial compliance and credit cannot be denied solely for absence of a formal declaration.

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