Modvat credit cannot be denied solely for endorsed invoices; actual receipt of inputs must still be verified.

Modvat credit is not denied merely because invoices issued by a manufacturer to its own stockyard were later endorsed in favour of the buyer. The operative factor remains whether the buyer actually received the inputs, and that factual verification is necessary before disallowing credit. Where the same credit claim had allegedly been accepted in a later identical situation, that aspect also required verification. On this basis, the matter was remanded for fresh consideration after receipt of inputs and related facts were examined.

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Issues: Whether Modvat credit could be denied merely because the invoices issued by the manufacturer to its own stockyard were endorsed in favour of the appellant, and whether the matter required verification of receipt of inputs by the appellant.

Analysis: The invoices were issued by the manufacturer to its own stockyard and were later endorsed in favour of the appellant. Such endorsement, by itself, was not treated as a valid ground to deny Modvat credit if the authorities were satisfied that the inputs had in fact been received by the appellant. The appellant's claim that credit had been allowed in an identical subsequent situation was also directed to be verified.

Conclusion: Denial of Modvat credit was set aside and the matter was remanded to the Assistant Commissioner for verification and fresh decision.

Final Conclusion: The appellant obtained relief by way of remand for reconsideration of its entitlement to Modvat credit after factual verification.

Ratio Decidendi: Endorsement of invoices by the input manufacturer to its own stockyard does not, by itself, justify denial of Modvat credit where actual receipt of inputs by the buyer remains to be verified.

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