Modvat credit documentation: integrated steel plant certificates remained valid duty-paying documents despite later restrictive circulars.

Modvat credit could not be denied merely because the duty-payment certificates were issued by an integrated steel plant other than SAIL or TISCO. Earlier Board circulars had consistently relaxed the documentary requirement, allowing credit on stockyard or plant certificates evidencing duty payment, and those instructions were not limited to certificates from SAIL or TISCO. The later 1989 circular, which attempted to narrow the facility, was inconsistent with the earlier circulars and could not override them. The subsequent 1994 notification also reflected the original 1986 circular as the operative basis for permissible documents. Certificates issued by the integrated steel plant were therefore valid duty-paying documents for Modvat credit.

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Issues: Whether Modvat credit could be denied on the basis that certificates issued by an integrated steel plant other than SAIL or TISCO were not valid duty-paying documents under Rule 57G.

Analysis: The earlier Board circulars, beginning with the instructions issued in 1981 under Rule 56A and extended to Modvat upon the introduction of the scheme, showed a consistent relaxation permitting credit on the basis of stockyard or plant certificates evidencing duty payment. Those instructions were not confined to certificates issued only by SAIL or TISCO, and the later 1989 circular, which purported to restrict the facility, was inconsistent with the earlier circulars and could not override them. The subsequent 1994 notification also reflected the original 1986 circular as the operative basis for the permitted documents. Since the supplier was an integrated steel plant, its certificates stood on the same footing as those of SAIL and TISCO.

Conclusion: The certificates were valid for taking Modvat credit, and denial of credit was unsustainable.

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