Modvat credit on capital goods cannot be denied merely because moulds or dies moved without a sale invoice.

Modvat credit on capital goods was recognised for moulds, dies and fixtures removed on payment of duty and received for manufacture, because Rule 57S(1)(ii) treats such movement as removal for home consumption even without a sale. The Tribunal also clarified that an invoice under Rule 52A is not limited to sale transactions, so the absence of sale particulars in the invoice did not by itself invalidate credit. Following earlier Tribunal reasoning and the Board clarification cited there, the objection to credit eligibility was rejected and the credit disallowance could not be sustained.

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Issues: Whether Modvat credit on capital goods was admissible in respect of moulds, dies and fixtures removed on payment of duty and received by the assessee, and whether the invoices were invalid merely because they did not evidence a sale.

Analysis: The issue was treated as covered by an earlier Tribunal decision involving the same kind of supply of moulds and dies for manufacture of automobile components. It was held that Rule 57S(1)(ii) permits removal of capital goods on payment of appropriate duty for home consumption, and that such removal within the country does not require a sale. The Tribunal also held that an invoice under Rule 52A is not confined only to a sale transaction. On that reasoning, and following the earlier decision and the Board's clarification referred to therein, the disallowance of credit could not be sustained.

Conclusion: Modvat credit was held admissible to the assessee, and the objection based on absence of sale in the invoices was rejected.

Final Conclusion: The impugned order was set aside and the assessee succeeded in both appeals on the credit eligibility issue.

Ratio Decidendi: Removal of capital goods on payment of duty under the Modvat scheme qualifies as removal for home consumption even without a sale, and credit cannot be denied merely because the supporting invoice does not record a sale.

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