Modvat credit for pre-declaration inputs accepted where Rule 57H was applied liberally to the initial scheme period.

Modvat credit was held admissible for inputs received before filing the Rule 57G declaration where the interval was treated as falling within Rule 57H's reference to inputs received "immediately before" the declaration. The procedural timing requirement was applied liberally in view of the initial implementation period of the Modvat scheme, and the credit claim was accepted on the facts as otherwise eligible. The assessee was therefore entitled to take the credit, and the departmental appeal failed.

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Issues: Whether the assessee was entitled to avail Modvat credit on inputs received before the filing of the Rule 57G declaration, having regard to Rule 57H and the timing of the declaration.

Analysis: The relevant question was whether the inputs could be treated as having been received "immediately before" the filing of the declaration so as to satisfy Rule 57H. The credit claim was tested against the practical position in the initial period of implementation of the Modvat scheme, and the procedural aspect of the declaration was viewed liberally. On the facts, the interval between receipt of inputs and the declaration was treated as covered by the rule, and the credit was found to be otherwise admissible.

Conclusion: The assessee was entitled to take the credit, and the departmental appeal failed.

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