Modvat credit for aluminium foil packing material upheld where declaration covered the material and records duly reflected its use.

Modvat credit on aluminium foil used as packing material was treated as admissible where the declaration described the foil as packing material and the same packing material was common to the relevant products. Since manufacture was not complete until such packing was done and the inputs were duly reflected in statutory records, the declaration was not regarded as deficient merely because the material was not separately identified as a distinct input for the product. A liberal construction of the declaration was applied, and credit was allowed.

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Issues: Whether Modvat credit on aluminium foil packing material was admissible when the material was declared as packing material in the declaration, though not separately treated as a distinct input for the product in question.

Analysis: The declaration covered aluminium printed and plain foil as packing material, and the packing material was common to the relevant products. The manufacture was not complete until such packing was done, and the inputs were duly accounted for in the statutory records. In these circumstances, a liberal view was warranted and the declaration could not be treated as deficient so as to deny credit.

Conclusion: The Modvat credit was rightly availed and the Revenue's challenge failed.

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