Modvat credit cannot be denied solely for export through merchant exporters without a disclaimer certificate where export is undisputed.

Modvat credit could not be denied merely because goods were exported through merchant exporters and the manufacturer had not furnished a disclaimer certificate, where the fact of export was undisputed. The Tribunal held that the authorities had relied on an inapplicable decision and followed the later view that export under bond through merchant exporters does not, by itself, disentitle the manufacturer to credit. On that basis, the denial of Modvat credit was found unjustified and consequential relief was granted.

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Issues: Whether Modvat credit could be denied to the manufacturer merely because the goods were exported through merchant exporters and the manufacturer had not submitted a disclaimer certificate.

Analysis: The Tribunal found that the authorities below had relied on a decision that was not applicable to the facts of the case. It applied the later Tribunal view that Modvat credit cannot be denied merely because the goods were exported under bond through merchant exporters, especially when there was no dispute that the goods were in fact exported.

Conclusion: Denial of Modvat credit was held to be unjustified and the appeal was allowed with consequential relief.

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