Modvat credit on capital goods was not denied for late declaration where proper filing preceded credit use.

Waiver of pre-deposit was considered in relation to Modvat credit on capital goods where the declaration was filed after receipt of the goods. The Board's circulars clarified that credit should not be denied merely because the declaration was filed after receipt, so long as a proper declaration was filed before credit was taken. As the unit had been registered shortly before the declaration, the balance of convenience was held to favour the applicants at the interim stage, and waiver of pre-deposit of duty and penalty was granted for hearing of the appeal.

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Issues: Whether waiver of pre-deposit was warranted where declaration for Modvat credit on capital goods was filed after receipt of the goods.

Analysis: The declaration was admittedly filed after receipt of the capital goods, but the unit had been registered shortly before the declaration was filed. The Board's circulars clarified that credit should not be denied merely because the declaration was filed after receipt of the capital goods, provided a proper declaration was filed before taking credit. On that basis, the balance of convenience was found to lie with the applicants at the interim stage.

Conclusion: Waiver of pre-deposit of duty and penalty was granted for hearing of the appeal.

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