Modvat credit cannot be denied for a fresh declaration lapse where earlier declarations were accepted and inputs remained unchanged.

Earlier accepted Modvat declarations continued to operate where the department had already assessed RT-12 returns, approved the classification list, and there was no change in manufacture or inputs. In that setting, the failure to file a fresh declaration for the relevant period was treated as a procedural lapse, not a substantive defect. The text states that such non-filing, by itself, did not justify denial of credit when the scheme had already been acted upon by the department and the underlying facts remained unchanged.

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Issues: Whether Modvat credit could be denied for the relevant period on the ground that the declaration was not filed afresh in the prescribed manner, when earlier declarations had already been filed and accepted and the department had assessed RT-12 returns and approved the classification list.

Analysis: The assessee had filed declarations for earlier periods and had been availing Modvat credit. The department had assessed RT-12 returns, noticed and rectified discrepancies, and approved the classification list. There was no change in the manufacturing process or the inputs used. In these circumstances, the requirement of filing a fresh declaration for the period in question was treated as a procedural matter, and the earlier accepted declarations were held to continue to operate for the disputed period. The prior Tribunal decisions relied on by the assessee supported the view that such an omission did not warrant denial of credit when the substantive facts remained unchanged and the scheme had already been acted upon by the department.

Conclusion: Denial of Modvat credit was not justified. The appeal was allowed and the assessee succeeded.

Ratio Decidendi: Where earlier Modvat declarations have been accepted and the department has acted upon the assessee's returns and records without any change in manufacture or inputs, a subsequent lapse in filing a fresh declaration is only a procedural infraction and cannot by itself justify denial of credit.

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