Modvat credit cannot be denied for minor invoice defects when duty-paid goods were received and used.

Modvat credit cannot be denied for minor discrepancies between manual and computerized invoices where the essential particulars are present, including duty payment, description of goods, assessable value, and identity of supplier and recipient. The record showed that the goods were received and used in manufacture, and the Department did not establish non-receipt, non-use, or mala fides. The accounting procedure relied on by the Revenue governed the issuer of the invoice, not the recipient. The invoice defects were treated as technical and explainable, so the credit disallowance and penalty were set aside.

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Issues: Whether Modvat credit could be denied on account of minor discrepancies in the manual and computerized invoices when the goods were received and utilized and the invoices substantially contained the requisite particulars.

Analysis: The invoices, though differing in certain particulars such as time, vehicle number, cross-reference, and mention of grade, were otherwise consistent in all material respects including description of goods, duty particulars, assessable value, and the identity of the supplier and recipient. The Department did not establish non-receipt of the goods, non-use in manufacture, or mala fides. The rule governing denial of credit did not permit disallowance merely because some particulars were missing, so long as the document contained the essential details of duty payment, description of goods, assessable value, and factory particulars. The accounting procedure relied on by the Revenue governed the issuer of the invoice and not the recipient. A liberal view was therefore warranted, and the discrepancies were treated as minor and explainable in the circumstances.

Conclusion: Modvat credit could not be denied on the basis of the stated invoice discrepancies, and the disallowance and penalty were set aside in favour of the assessee.

Ratio Decidendi: Credit under the Modvat scheme cannot be denied for minor or technical defects in supporting documents where the essential particulars are present and the duty-paid goods are shown to have been received and used.

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