Modvat credit on roughly shaped forgings was upheld where description matched goods and sub-heading correction supported the claim.

Modvat credit could not be denied where the inputs were described in the declaration and gate passes as roughly shaped forgings or roughly shaped flanges, and the sub-heading was later corrected. The description was held to cover the goods actually received, the supplier's version was not disproved by any verification, and the final product was not in dispute. Evidence showed that the received goods were processed into final flanges only after machining and finishing. Denial of credit was therefore unjustified, and the disallowance of credit and penalty were set aside.

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Issues: Whether Modvat credit could be denied on the ground that the inputs were described in the declaration and gate passes as roughly shaped forgings or roughly shaped flanges and the sub-heading was subsequently corrected.

Analysis: The description of the inputs was found to cover the goods received, and the subsequent correction of the sub-heading supported the appellants' case. There was no verification from the supplier to disprove that the goods supplied were roughly shaped flanges. The final product was not in dispute, and the evidence showed that the received goods were processed into the final flanges after machining and finishing.

Conclusion: Denial of Modvat credit was unjustified. The appeal was allowed and the disallowance of credit and penalty were set aside.

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