Modvat credit and invoice defects: minor procedural lapses cannot defeat credit when receipt and duty payment are undisputed.

Modvat credit could not be denied where the inputs were received and the duty-paid nature of the goods was undisputed, and the only objection was to technical or procedural defects in the invoices. The credit scheme required prescribed duty-paying documents and particulars, but the governing circular allowed minor lapses to be ignored when the essential conditions were satisfied. The cited Larger Bench ruling was distinguished because the duty-paying document itself was absent there, whereas valid invoices were available in this matter. The result was that procedural defects alone did not justify denial of credit.

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Issues: Whether Modvat credit could be denied on the basis of invoices suffering from technical or procedural defects when the receipt of inputs and payment of duty were not disputed.

Analysis: The credit scheme requires duty-paying documents and prescribed particulars, but the governing circular empowered the departmental authority to ignore minor procedural lapses where the essential conditions were satisfied. The Revenue did not dispute receipt of the inputs or the duty-paid nature of the goods. The objection was confined to missing or defective particulars in the invoices. In these circumstances, the absence of some details did not justify denial of credit. The cited Larger Bench ruling was distinguished because, there, the prescribed duty-paying document itself was absent, whereas here the relevant invoices were available.

Conclusion: Modvat credit could not be denied merely for procedural defects in the invoices, and the issue was decided in favour of the assessee.

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