Deemed Modvat credit cannot be denied for a formal invoice omission where duty is substantively treated as paid under the scheme.

Deemed Modvat credit under Notification No. 58/97-C.E. could not be denied merely because the supplier's invoice omitted words stating that duty liability had been discharged under Rule 96ZP. The notification treated duty on declared inputs as deemed paid, and Rule 96ZP provided the payment mechanism for re-rolling mills with its own recovery provisions; read together, clearances were to be treated as duty paid. A purely formal defect in the invoice declaration did not defeat the credit where the notification did not expressly require that specific wording. The reference was answered in favour of the assessee.

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Issues: Whether deemed Modvat credit under Notification No. 58/97-C.E. could be denied merely because the supplier's invoice did not contain the words indicating that duty liability was discharged under Rule 96ZP of the Central Excise Rules, 1944.

Analysis: The notification treated duty on the declared inputs as deemed to have been paid and allowed credit of such deemed duty to the manufacturer of the final products. The condition in the notification requiring appropriate duty payment under Section 3A of the Central Excise Act, 1944 was held not to prescribe any particular form of words on the invoice. Rule 96ZP of the Central Excise Rules, 1944 provided the payment mechanism for re-rolling mills on a periodic basis and also contained its own recovery machinery for default. Reading the notification with Rule 96ZP, the clearances by such mills were to be treated as duty paid, and credit could not be denied on a merely formal omission in the invoice.

Conclusion: Deemed Modvat credit could not be denied on the ground that the invoice did not bear the specific declaration of duty liability discharged under Rule 96ZP. The reference was answered in favour of the assessee.

Ratio Decidendi: Where a notification grants deemed duty credit on substantive satisfaction of the statutory scheme, a purely formal defect in the invoice declaration cannot defeat the benefit unless the notification expressly makes such wording mandatory.

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