Modvat credit cannot be denied for procedural lapse alone where inputs were sent to a job worker and returned as required.

Modvat credit could not be denied solely because inputs were sent to a job worker without prior permission under Rule 57F(2) of the Central Excise Rules, 1944. The omission was treated as a procedural lapse, not a substantive breach, where there was no allegation or evidence that the inputs were not actually sent or were not received back. The settled tribunal view applied was that failure to obtain permission by itself does not justify denial of credit when the substantive conditions are otherwise satisfied.

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Issues: Whether Modvat credit could be denied merely because the assessee had sent inputs to a job worker without obtaining prior permission under Rule 57F(2) of the Central Excise Rules, 1944.

Analysis: The only dispute was the absence of permission under Rule 57F(2). There was no allegation or evidence that the inputs were not actually sent to the job worker or that they were not received back. The omission was treated as a procedural lapse and a rectifiable defect, and the settled tribunal view was that failure to obtain permission by itself does not justify denial of Modvat credit where the substantive conditions are otherwise satisfied.

Conclusion: Modvat credit could not be denied solely on account of non-obtaining of permission under Rule 57F(2), and the assessee succeeded on this issue.

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