MODVAT credit cannot be denied for stock transfer invoices or delivery challans when duty payment and receipt are undisputed.

MODVAT credit under Notification No. 29/2000-C.E. (N.T.) and Rule 57AK of the Central Excise Rules, 1944 cannot be denied merely because inputs were received under delivery challans or stock transfer invoices instead of sale invoices. Where the duty-paid character of the inputs, actual receipt, and genuineness of the supporting documents are not in dispute, the notification conditions do not create an inflexible bar to credit. The Tribunal accordingly upheld the assessee's credit and rejected the Revenue's appeal.

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Issues: Whether MODVAT credit could be denied merely because the inputs were received under delivery challans or stock transfer invoices instead of sale invoices, where the duty-paid nature of the inputs, their receipt, and the genuineness of the documents were not disputed.

Analysis: The dispute turned on the interpretation of Notification No. 29/2000-C.E. (N.T.) and Rule 57AK of the Central Excise Rules, 1944. The Tribunal noted that the relevant earlier decision had already held that credit is admissible even when inputs are received under stock transfer invoices, and that the benefit cannot be denied solely for want of a sale invoice when there is no controversy regarding duty payment, actual receipt of inputs, or authenticity of the documents. The notification conditions were not read as creating an inflexible bar against credit in such a situation.

Conclusion: MODVAT credit could not be denied only because the inputs were received under delivery challans or stock transfer invoices. The appeal by the Revenue was rejected and the credit allowed to the assessee was upheld.

Ratio Decidendi: Credit under the relevant excise notification cannot be denied merely for use of stock transfer or delivery challans, if the duty-paid character of the inputs, their receipt, and the genuineness of the supporting documents are otherwise established.

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