Court grants Modvat credit appeal, citing precedent on duty paying documents. Denial on procedural grounds not aligned with statute.

The court allowed the appeal, setting aside the denial of Modvat credit to the appellants amounting to Rs. 1,43,162. The judge referenced precedent, stating that duty paying documents showing the address of another unit of the same manufacturer should be considered valid for credit purposes. As long as inputs were received and utilized in final products, denial of credit on procedural grounds was not aligned with the statute. The decision was made on 17-4-2009, and the issue of the demand being time-barred was not addressed.

---

---

Issues:
Modvat credit denial due to invoices in the name of different units. Invocation of extended period of limitation.

Analysis:
The case involved the denial of Modvat credit amounting to Rs. 1,43,162/- to the appellants because the invoices used for availing the credit were in the name of a different unit of the same manufacturer. The demand was confirmed by invoking the extended period of limitation.

The appellant's representative argued that out of the disputed 8 invoices, 2 were in the name of Unit-III and the remaining 6 were in the name of Unit-II, while the credit was taken in Unit-I. The appellant explained that the ECC number discrepancy occurred because the suppliers mistakenly mentioned 003 or 002 at the end of the registration number, which actually represented Units-I, II, and III due to the same PAN number. The show cause notice was issued based on the invoices not being in the name of Unit-I, but the authorities alleged that inputs might have been utilized in other units, which was not the ground of the notice.

The Revenue's representative reiterated that Modvat credit cannot be availed by Unit No. I if the documents are in the name of other units, regardless of receiving the inputs.

Upon considering both arguments, the judge referred to the Larsen & Toubro case, where it was established that duty paying documents showing the address of another unit of the same manufacturer should be considered valid for Modvat credit purposes. The judge noted that the Commissioner (Appeals) did not apply the decision in the Chemplast Sanmar Ltd. case as it involved rectifiable mistakes in the invoices. As long as the inputs were received and utilized in the final products, denial of credit on procedural grounds would not align with the statute. Consequently, the impugned order was set aside, and the appeal was allowed with relief to the appellant.

Since the appeal was allowed on merits, the issue of the demand being time-barred was not addressed during the judgment. The decision was pronounced on 17-4-2009.

---