Modvat credit cannot be denied merely because the declaration was filed under the wrong rule

Modvat credit could not be refused solely because the declaration was first filed under Rule 57Q instead of Rule 57A, as the form of declaration was not determinative by itself. Applying the Larger Bench ruling in Modi Rubber, the tribunal held that substantive entitlement had to be examined on the merits, and the initial invocation of the capital goods provision did not by itself defeat credit. The adjudicating authority was required to consider the claim substantively rather than reject it on the basis of the incorrect rule cited in the declaration.

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Issues: Whether Modvat credit under Rule 57A could be denied merely because the declaration had initially been filed under Rule 57Q instead of Rule 57A.

Analysis: The larger bench ruling in Modi Rubber was applied to hold that the form of declaration is not ative by itself and that credit cannot be refused only on the ground that the assessee initially proceeded under the capital goods provision. The substantive entitlement had still to be examined on the merits by the adjudicating authority.

Conclusion: Modvat credit could not be denied solely because the declaration was filed under Rule 57Q instead of Rule 57A.

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