Modvat credit allowed despite transitional documentation defect where duty-paid inputs were undisputed and amended procedure had not fully settled.

Modvat credit could not be denied for a transitional procedural lapse where the assessee relied on a superintendent-countersigned certificate shortly after the amendment requiring a supplementary invoice. The duty-paid character of the inputs was undisputed, and the change in procedure had not yet fully reached trade practice or departmental implementation. In these exceptional circumstances, the tribunal treated the deviation as unintentional and held that a strict approach to the changed documentation requirement was unwarranted. The assessee was therefore entitled to the credit, and denial based only on the procedural defect was not justified.

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Issues: Whether Modvat credit could be denied merely because the assessee took credit on the basis of a superintendent-countersigned certificate during the transitional period after the amendment requiring a supplementary invoice.

Analysis: The amendment substituting the countersigned certificate with a supplementary invoice had come into force shortly before the credit was taken. The certificate was issued only a few days after the change, and the circumstances showed that the assessee acted in the interim period before the amended procedure had fully percolated to the trade and the department. The duty-paid nature of the inputs was not in dispute, and the later ability to obtain the proper invoice did not justify denial of the credit. In such extraordinary transitional circumstances, a strict approach to an unintentional procedural deviation was unwarranted.

Conclusion: The assessee was entitled to the Modvat credit, and denial of the credit on the basis of the procedural defect was not justified.

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