Modvat credit cannot be denied for citing the wrong rule when input eligibility is otherwise established.

Modvat credit could not be denied merely because the assessee cited the wrong rule, where admissibility on merits had already been found. The appellate authority had held that welding rods and lubricating oil were eligible inputs under Rule 57A, and that finding was not challenged by the revenue. Once substantive entitlement stood affirmed, a mistaken reference to Rule 57Q in part of the proceedings did not defeat the credit claim. The denial of credit on the basis of the wrong rule reference was therefore unsustainable and the issue was decided in favour of the assessee.

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Issues: Whether Modvat credit could be denied merely because the assessee mentioned the wrong rule, when the appellate authority had already recorded a finding that the goods were admissible as inputs under the correct rule.

Analysis: The lower appellate authority had categorically found that welding rods and lubricating oil were eligible for Modvat credit as inputs under Rule 57A, and that finding was not challenged by the revenue. Once admissibility on merits stood affirmed, the benefit could not be refused only because the claim was described under Rule 57Q in part of the proceedings. A mistaken reference to the rule could not defeat a substantive entitlement already found in favour of the assessee.

Conclusion: The denial of credit on the ground of wrong rule reference was unsustainable and the issue was decided in favour of the assessee.

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