Modvat credit allowed despite delayed declaration, as the lapse was technical and duty-paid receipt of goods was undisputed.

Modvat credit was held admissible where the declaration was filed after receipt of the capital goods but before credit was taken, and the goods' duty-paid receipt in the factory was not disputed. The absence of a separate condonation application under Rule 57T(1) was treated as a technical lapse, especially since the department had raised no objection when the declaration was filed and Board circulars discouraged denial of credit on purely technical grounds. Credit was therefore allowed for the goods covered by the relevant invoice, while the debit already upheld remained unchanged.

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Issues: Whether Modvat credit was admissible where the declaration was filed after receipt of the capital goods but before taking credit, and no separate application for condonation of delay was filed.

Analysis: The credit was taken only after the declaration had been filed. The objection was that Rule 57T(1) required a condonation application when the declaration was not filed before receipt of the goods. The declaration had been filed and the department had raised no objection at that stage. The Board circulars also clarified that Modvat credit should not be denied on technical grounds where the duty-paid character of the goods and receipt in the factory were not in dispute. On these facts, the absence of a condonation application was treated as a technical lapse.

Conclusion: Modvat credit was admissible to the assessee for the goods covered by Invoice No. 1212 dated 23-3-1996, and the denial of credit on this ground was set aside. The debit of Rs. 7,597/- remained upheld.

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