Modvat credit cannot be denied for missing Rule 57G declaration when duty-paid inputs and substantive scheme conditions are satisfied.

Modvat credit could not be denied solely because the assessee had not filed a declaration under Rule 57G, where the inputs were duty-paid and the substantive conditions of the Modvat scheme were otherwise satisfied. The absence of the declaration was treated as non-fatal in the circumstances, particularly where the credit claim arose only after duty became payable on the inputs. The governing principle stated that procedural non-compliance with the declaration requirement does not override entitlement to credit when the core eligibility conditions are met.

---

---

Issues: Whether Modvat credit could be denied merely because the assessee had not filed a declaration under Rule 57G of the Central Excise Rules, 1944.

Analysis: The reference application was examined on the question whether any referable question of law arose. The governing principle applied was that Modvat credit is admissible where the inputs are duty-paid and the other requirements of the Modvat scheme are satisfied, even if a declaration under Rule 57G had not been filed. The Tribunal treated the absence of such declaration as not fatal in the circumstances, particularly where the credit claim arose only after duty became payable on the inputs.

Conclusion: Modvat credit could not be denied solely for non-filing of the declaration under Rule 57G, and the issue was answered in favour of the assessee.

Ratio Decidendi: Modvat credit cannot be refused merely on the ground of non-filing of a declaration under Rule 57G when the inputs are duty-paid and the substantive conditions for credit are otherwise satisfied.

---