Modvat credit on inputs sent to a job worker was upheld where invoices satisfied prescribed documentation requirements.

Inputs supplied to a job worker by a principal manufacturer under invoices issued under the Central Excise Rules, 1944 were accepted as eligible for Modvat credit, despite the department's objection that there was no conventional sale under those invoices. The Tribunal followed its earlier decision on identical facts and treated the transfer as a sale for excise-credit purposes, provided the invoices contained the required particulars and functioned as valid documents for availing input duty credit. On that basis, the assessee's credit was upheld and the Revenue's challenge failed.

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Issues: Whether Modvat credit was admissible on inputs supplied to a job worker by the principal manufacturer under invoices issued under the Central Excise Rules, 1944, when the department contended that there was no sale under those invoices and therefore they were not valid documents for credit.

Analysis: The dispute was governed by the earlier decision of the Tribunal on identical facts involving job work for the same principal manufacturer. The Tribunal followed that view and accepted that inputs supplied to the job worker under the relevant invoices could support Modvat credit. The reasoning accepted was that such transfer of inputs, though not a conventional sale, was treated as sale for the purpose of the credit scheme, and the invoices containing the necessary particulars were valid documents for availing input duty credit.

Conclusion: Modvat credit was rightly availed by the assessee and the Revenue's challenge failed.

Final Conclusion: The impugned order allowing credit was maintained and the Revenue's appeals were dismissed.

Ratio Decidendi: Inputs supplied to a job worker under invoices issued by the principal manufacturer can qualify for Modvat credit where the transfer is treated as sale for excise purposes and the invoices satisfy the prescribed documentation requirements.

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