CENVAT credit cannot be denied for minor weighment differences within tolerance limits when valid invoices and no transit loss are shown.

CENVAT/MODVAT credit remained admissible on the full invoiced quantity where the inputs were received under valid invoices and the small difference between invoice weight and factory weighment was only a minor variation within prescribed tolerance limits under the Standards of Weights and Measures regime. The earlier view that no inflexible standard can be applied to weighment differences was followed, and the absence of any proof of diversion, transit loss, or receipt of non-duty-paid inputs meant the credit could not be restricted to the lower factory weight. The Revenue's objection to the marginal shortage was rejected.

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Issues: Whether CENVAT/MODVAT credit was admissible on the quantity of inputs covered by invoices where the weight recorded at the recipient factory was marginally less than the invoice weight because of differences in weighment on different weighbridges, the variation being within prescribed tolerance limits.

Analysis: The inputs were received in lorryloads and weighed at the recipient factory, and the discrepancy between invoice weight and register weight was only about 0.02% to 0.04%, which was within the tolerance limits certified under the Standards of Weights and Measures regime. The earlier Larger Bench view held that no inflexible standard can be applied and that minor variations due to weighment on different machines must be ignored if they remain within tolerance limits. The respondent also supported its claim with valid invoices and metrology certificates, and there was no finding of diversion, transit loss, or non-duty-paid inputs. The statement relied upon by the Revenue did not amount to an admission that any part of the consignment was actually lost in transit or that any proportionate recovery from the transporter had been made in respect of the disputed consignments.

Conclusion: Credit was admissible on the entire quantity covered by the invoices, and the Revenue's objection to the marginal shortage was rejected.

Ratio Decidendi: Where inputs are received under valid invoices and any quantity difference is only a minor weighment variation within prescribed tolerance limits, without proof of diversion or transit loss, CENVAT/MODVAT credit cannot be curtailed to the reduced factory weighment.

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