Modvat credit cannot be denied for incomplete input description where transformers were declared and notice limits were exceeded.

Modvat credit could not be denied merely because 25 KVA transformers were not described by capacity in the declaration, since the declaration identified them as inputs and the capacity description only reflected the semi-finished condition of the transformer. The adjudicating authority also went beyond the allegations in the show cause notice, which was impermissible. The order denying credit was set aside and the matter was remanded for fresh adjudication confined to the notice allegations.

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Issues: Whether denial of Modvat credit on the ground of non-declaration of 25 KVA transformers was sustainable, and whether the adjudicating authority had travelled beyond the scope of the show cause notice.

Analysis: The declaration produced before the Tribunal showed the transformers as declared inputs, and the absence of the capacity description could not by itself justify denial of credit because capacity only described the semi-finished condition of the transformer. The impugned order also proceeded on grounds beyond the allegation made in the show cause notice. Since the declaration was not considered by the adjudicating authority in the absence of a detailed reply, the matter required fresh consideration confined to the notice allegations.

Conclusion: The order denying credit was set aside and the matter was remanded for de novo adjudication confined to the show cause notice.

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