Modvat credit survives minor invoice defects where duty payment and receipt of inputs are undisputed, with clarificatory circular applied to pending matters.

Modvat credit cannot be denied where the inputs are duty-paid and received in the factory, and the only defect is a procedural omission in the dealer's invoice. The document treats the invoice irregularity as a minor technical lapse that does not defeat substantive entitlement when the essential conditions for credit are otherwise satisfied. It also states that a clarificatory Board circular on such lapses applies to pending matters, and rejects the view that it operates only prospectively. Accordingly, the circular supports allowance of credit despite the document defect.

---

---

Issues: Whether Modvat credit could be denied merely because the dealer's invoices did not contain all prescribed particulars and whether the subsequent Board circular clarifying that minor technical lapses should not result in denial of credit applied retrospectively.

Analysis: The dispute concerned credit taken on duty-paid inputs received by the appellant, where the substantive fact of duty payment and receipt of goods was not in dispute. The defect relied on by the department was only a procedural one relating to particulars in the invoices. A Board circular clarifying that credit should not be denied for minor technical lapses was treated as applicable to the case, and the view that such a circular operated only prospectively was rejected. The reasoning also followed the settled principle that procedural deficiencies cannot defeat credit when the essential conditions for availment are otherwise satisfied.

Conclusion: Modvat credit could not be denied on the basis of the invoice irregularity, and the Board circular was applicable to the assessee.

Ratio Decidendi: Credit under the Modvat scheme cannot be denied for a merely procedural defect in the duty-paying document when the duty-paid nature of the inputs and their receipt in the factory are not disputed, and a clarificatory circular on such lapses applies to pending matters.

---