Modvat credit cannot be denied where Rule 57G declaration was filed before credit was availed, despite earlier receipt of inputs.

Modvat credit under Rule 57G could not be denied merely because inputs were received in the factory before the declaration was filed, where the declaration was filed before credit was actually taken. Filing the declaration before availing the benefit satisfied the relevant compliance requirement, and the prior receipt of goods was not a sufficient ground to reject credit. The denial of Modvat credit was therefore unsustainable and the claim was allowed in favour of the assessee.

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Issues: Whether Modvat credit could be denied merely because the inputs were received before filing the declaration, when the declaration under Rule 57G was filed before the credit was actually taken.

Analysis: The credit was taken only after the declarations were filed. The objection that the inputs had been received in the factory before the declaration was held to be insufficient to deny credit, since the relevant compliance was filing the declaration before availing the benefit. On that basis, the denial of Modvat credit was found unsustainable.

Conclusion: The issue was decided in favour of the assessee, and Modvat credit could not be denied on the ground that the goods were received before the declaration was filed.

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