Procedural delay in Modvat declaration cannot defeat credit where duty-paid inputs were received, used, and properly recorded.

Modvat credit on Sodium Tri Poly Phosphate could not be denied solely because the declaration under Rule 57G was filed late, where the input was duty paid, received and used in manufacture, and duly reflected in statutory records. The records showed no dispute on duty payment, receipt, actual use, or departmental verification of the relevant transactions. In these circumstances, the absence of a specific declaration for the period was treated as a procedural lapse that did not defeat substantive entitlement to credit. Denial of credit on that ground was set aside and the assessee was held entitled to the Modvat credit.

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Issues: Whether Modvat credit on Sodium Tri Poly Phosphate could be denied merely because a specific declaration under Rule 57G was filed belatedly, when the input was duty paid, duly received, used in manufacture, and reflected in the statutory records.

Analysis: The input was a specified input under the Modvat scheme and the final product was also a specified product. The records showed receipt and utilisation of the input in the prescribed registers, the exports were under scrutiny of the departmental officers, and no dispute existed regarding duty payment, receipt, or actual use of the input. The omission was confined to the absence of a specific declaration for the input for the relevant period. In these circumstances, the filing of declaration was treated as not defeating substantive entitlement to credit where all material conditions stood satisfied.

Conclusion: The denial of Modvat credit on the sole ground of non-declaration under Rule 57G was set aside and the assessee was held entitled to the credit.

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