Modvat credit cannot be denied on a hyper-technical fresh declaration objection when prior notices and eligibility conditions are already satisfied.

Modvat credit could not be denied merely because a fresh Rule 57G declaration was not filed when the department was already on notice through earlier declarations and the same final products continued during the relevant period. The assessee's Rule 173B declaration referred to availing the benefit of Notification No. 7/97 and claiming Modvat credit after crossing the prescribed turnover limit, and the later intimation confirmed that threshold had been crossed. On those facts, the substantive conditions for credit were satisfied, so a separate fresh declaration was not required. Denial of credit on that hyper-technical ground was unsustainable.

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Issues: Whether Modvat credit could be denied on the ground that a fresh declaration under Rule 57G was not filed, despite an earlier declaration and intimation of crossing the turnover threshold under the Small Scale Industry notification.

Analysis: The assessee had already filed declarations for the earlier year, the final products remained the same in the relevant period, and the declaration under Rule 173B specifically referred to availing the benefit of Notification No. 7/97 and to claiming Modvat credit after crossing the prescribed turnover limit. The later letter intimating that the turnover had crossed Rs. 1 crore showed that the conditions for availing credit had been met. In these circumstances, denial of credit merely for want of a separate fresh declaration was not justified.

Conclusion: The denial of Modvat credit was unsustainable and the assessee succeeded on this issue.

Ratio Decidendi: Where the department is already on notice through prior declarations and the relevant factual conditions for availing Modvat credit are satisfied, credit cannot be denied on a hyper-technical objection that a fresh declaration was not filed.

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