Modvat credit and loan licence declarations: procedural defects in filing did not justify denial where manufacture and inputs were duly disclosed.

Modvat credit could not be denied merely because the Rule 57G declaration was filed in the name of the loan licensor-manufacturer rather than only in the name of the loan licence unit. The declaration disclosed the respondents' loan licence status and excise registration, an earlier letter had informed the Department that manufacture was undertaken on behalf of the licensor, and a revised declaration was later filed. As the declared inputs were used in the declared final products and the Department had accepted the position, the defect was treated as procedural, not substantive, and credit was held admissible on the facts.

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Issues: Whether Modvat credit could be denied because the declaration under Rule 57G was filed in the name of the loan licensor-manufacturer, and not solely in the name of the unit manufacturing the goods on loan licence.

Analysis: The declaration filed in 1987 disclosed the respondents' status as loan licensees and mentioned their Central Excise licence number. An earlier letter had already informed the Department that the goods were being manufactured on behalf of the loan licensor, and a revised declaration was later filed. There was no dispute that the declared inputs were used in the declared final products manufactured in the respondents' factory. In this setting, the Tribunal treated the respondents as manufacturers in their own right for excise purposes and held that the lapse was procedural rather than substantive, especially when the Department had accepted the earlier declaration and the position was subsequently cured by a revised declaration.

Conclusion: Denial of Modvat credit was not justified on the facts; the respondents succeeded on the issue.

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