Modvat credit cannot be denied for non-entry in RG 23A Part I when receipt and use of inputs are proved.

Modvat credit could not be denied merely because inputs were not entered in RG 23A Part I when receipt of the inputs in the factory and their use in manufacture were established. Although maintenance of RG 23A Part I was a mandatory requirement, denial of credit depended on whether the substantive conditions for availing Modvat credit were satisfied. On the undisputed facts of receipt and use, procedural non-entry alone was insufficient to disallow the credit, and the Revenue's relied-on precedent was distinguished on its facts.

---

---

Issues: Whether Modvat credit could be denied solely because the inputs were not entered in the RG 23A Part I register, despite evidence of receipt and use of the inputs in manufacture.

Analysis: The statutory requirement of maintaining RG 23A Part I was mandatory, but denial of credit depended on whether the other conditions for availing Modvat credit were satisfied. The record showed receipt of the inputs into the factory and their use in the manufacture of final products, and there was no dispute on those substantive facts. The earlier decision relied on by the Revenue was distinguished on its facts.

Conclusion: Modvat credit could not be disallowed merely for non-entry in RG 23A Part I when substantive compliance with the credit conditions was established; the issue was decided in favour of the assessee.

---