Modvat credit admissibility upheld where the claimed amount was within the credit permitted under the notification and conditions were met.

Modvat credit could not be denied where duty-paid ingots were received before the cut-off date, remained in stock on 1 April 2000, and the notification's conditions were satisfied. Although the notification permitted credit at 12% of value subject to stipulated requirements, the assessee claimed only the duty shown on the invoices, which was less than the credit otherwise admissible. Since the amount taken did not exceed the legally available credit, disallowance was unsustainable. An earlier Tribunal view on the same issue supported this result.

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Issues: Whether Modvat credit could be denied on the ground that the assessee had taken credit equal to the duty paid on the ingots instead of credit at 12% of the value prescribed under Notification No. 29/2000 (N.T.) dated 31 March 2000.

Analysis: The dispute concerned duty-paid stock of ingots received before the cut-off date and found in stock on 1 April 2000. The notification permitted credit at 12% of the value of goods subject to stipulated conditions, including direct purchase from the manufacturer and payment through cheque. The assessee had taken credit only to the extent of the duty reflected in the invoices, which was less than the credit otherwise available under the notification. Since the conditions of the notification were satisfied and the lesser amount taken did not exceed the admissible credit, there was no valid basis to disallow it. The earlier Tribunal decision on the same issue also supported the assessee.

Conclusion: The Modvat credit was admissible and its denial was unsustainable.

Ratio Decidendi: An assessee cannot be denied credit when the amount taken is within the credit legally admissible under the notification and the prescribed conditions are otherwise satisfied.

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