Modvat credit on duty-paid depot invoices cannot be denied merely for want of subsidiary documents or registration objections.

Modvat credit was admissible on lubricating oils received under invoices issued by a public sector undertaking depot where the goods had already suffered duty and the depot was treated as a warehouse. The invoices were accepted as proof of duty payment for Modvat purposes, and departmental instructions required such invoices or certificates to be accepted without insisting on subsidiary gate passes or similar supporting documents. Credit could not be denied merely because of objections about the depot's registration or the absence of additional documentation, in the absence of any finding that the goods were otherwise ineligible or that the duty-paid character of the invoices was doubtful.

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Issues: Whether Modvat credit could be denied on lubricating oils received under invoices issued by a public sector undertaking depot, when the goods had suffered duty and the depot was treated as a registered warehouse.

Analysis: The goods were manufactured by the public sector undertaking and duty had been paid on them before being sent to the depot. The depot was treated as a warehouse and registration under the relevant excise rules was asserted. The invoices issued by the public sector undertaking were acceptable documents evidencing payment of duty for Modvat purposes, and departmental instructions specifically directed that such invoices or certificates should be accepted without insisting on subsidiary gate passes or similar documents. Revenue could not deny credit to the recipient when there was no finding that the goods were otherwise ineligible or that the duty-paid character of the documents was doubtful.

Conclusion: Modvat credit was admissible and the denial of credit was unsustainable.

Final Conclusion: The assessee was entitled to credit on the duty-paid invoices issued by the public sector undertaking depot, and the impugned denial was set aside.

Ratio Decidendi: Where duty-paid goods are received under invoices issued by a public sector undertaking depot or warehouse, and departmental instructions recognise such invoices as acceptable proof of duty payment, Modvat credit cannot be denied merely for want of subsidiary documents or registration objections against the depot.

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