Modvat credit and belated Rule 57G declarations: later condonation amendment could not apply to the relevant period.

Modvat credit was denied where inputs were received before the Rule 57G declaration was filed, and the later condonation mechanism under Rule 57G(5), inserted by Notification No. 8/93, was held inapplicable because it was not in force during the relevant period. The appellate authority had already sustained the denial of credit on merits and interfered only with the penalty, so the later amendment did not affect the transaction. The revenue challenge accordingly failed, leaving the denial of Modvat credit undisturbed.

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Issues: Whether Modvat credit could be denied merely because the declaration under Rule 57G was filed after receipt of inputs, and whether Rule 57G(5) introduced later by Notification No. 8/93 could be applied to the period in dispute.

Analysis: The inputs were received before the declaration was filed, but the later provision empowering condonation of delay under Rule 57G(5) was introduced only by Notification No. 8/93 dated 02.11.1993. That provision was not in force at the material time and therefore could not govern the transaction. The appellate authority had already upheld the denial of Modvat credit on merits and had only interfered with the penalty.

Conclusion: The later amendment had no application to the relevant period, and the denial of Modvat credit was not disturbed. The revenue appeal failed.

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