Mandatory Modvat declaration of inputs barred credit on an undeclared input; job-work permission did not cure non-disclosure.

Mandatory prior declaration of inputs under the Modvat scheme was enforced: where a manufacturer failed to include copper wire scrap in the Rule 57G declaration, credit could not be claimed on that input. Permission for job work under Rule 57F did not amount to substantial compliance with the separate declaration requirement. The only possible route for inputs already received before declaration was Rule 57H, subject to the prescribed satisfaction of the Assistant Collector, and the later six-month relaxation was not applicable at the material time. Credit on the undeclared input was therefore inadmissible and recoverable, except to the extent already reversed.

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Issues: Whether Modvat credit could be allowed on an input that was not included in the declaration filed under Rule 57G, and whether permission taken for job work under Rule 57F could amount to substantial compliance with the declaration requirement.

Analysis: Rule 57G(1) required a manufacturer intending to take credit on inputs to file a declaration describing the final products and the inputs intended to be used and to obtain dated acknowledgment. The admitted position was that copper wire scrap was not included in the declaration. The permission obtained for movement of scrap for job work under Rule 57F did not dispense with the separate statutory requirement of declaring the input under Rule 57G. The authorities and decisions relied upon by the assessee concerned broad description of inputs, tariff classification discrepancies, or related procedural aspects, and did not govern a case of complete non-declaration of the input. If inputs had already been received before filing the declaration, the matter could only be considered under Rule 57H, subject to the prescribed satisfaction of the Assistant Collector. The later relaxation regarding filing within six months was not applicable at the material time.

Conclusion: Modvat credit was not admissible on the undeclared input, and the amount so availed was recoverable, except for the credit already reversed by the assessee in respect of inputs cleared under Rule 57F(2).

Final Conclusion: The mandatory declaration requirement under the Modvat scheme was enforced, and the assessee could not retain credit on an input omitted from the declaration filed under the relevant rules.

Ratio Decidendi: Where the scheme requires prior declaration of inputs, complete non-declaration of a particular input disentitles the assessee to Modvat credit unless the case is brought within the specific relaxation or transitional provision governing pre-declaration receipts.

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