Modvat credit on TR-6 challan accepted where duty payment was genuine and inputs went into dutiable manufacture.

TR-6 challan was treated as an acceptable duty-paying document for Modvat credit where duty payment on molasses was undisputed, the challan's authenticity was not challenged, and the goods were used in manufacture of dutiable final products. Although TR-6 challan was not expressly listed under Rule 57G of the erstwhile Central Excise Rules, 1944, the appellate view was upheld in the peculiar facts because the document evidenced actual duty payment and credit could not be denied on that ground. The demand was therefore held unsustainable.

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Issues: Whether TR-6 challan could be accepted as a valid duty paying document for availment of Modvat credit under the facts of the case.

Analysis: Duty on the molasses was not in dispute, and the authenticity of the TR-6 challan was also not questioned. The only objection was that TR-6 challan was not expressly specified as a valid duty paying document under Rule 57G of the erstwhile Central Excise Rules, 1944. In the peculiar facts, the challan evidenced payment of duty and the goods were used in manufacture of dutiable final products. The appellate authority had therefore treated the challan as sufficient for credit purposes, and no reason was found to take a different view.

Conclusion: TR-6 challan was held to be acceptable for Modvat credit in the facts of the case, and the demand was not sustainable.

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