Modvat credit admissibility on invoices issued to principal manufacturers upheld for direct factory receipt of inputs.

Modvat credit was treated as admissible where a loan licencee received inputs directly in its factory for use in manufacturing pharmaceutical products for principal manufacturers, even though the invoices were made out to those principal manufacturers. The Tribunal followed its earlier view that credit is available when goods are purchased for and supplied directly to the manufacturer, and it rejected the objection based solely on the invoice names. The principal manufacturers' exemption from registration under Rule 174, by Notification No. 27/92-CE dated 9 December 1992, did not defeat the assessee's entitlement to credit on these facts.

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Issues: Whether Modvat credit was admissible where inputs were received in the assessee's factory under invoices made out to the principal manufacturers, and whether the assessee could claim credit on that basis.

Analysis: The assessee, a loan licencee manufacturing pharmaceutical products, received inputs directly for use in manufacture for the principal manufacturers. The principal manufacturers were exempted from registration under Rule 174 of the Central Excise Rules by Notification No. 27/92-CE dated 9/12/92. Following the Tribunal's earlier view that credit is admissible when goods are purchased for and supplied directly to the manufacturer, the objection that the invoices stood in the name of the principal manufacturers was not accepted.

Conclusion: Modvat credit of Rs. 91,519.54 was held admissible to the assessee.

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