Modvat/Cenvat credit on endorsed invoices upheld where duty-paid inputs and genuineness of documents were established.

Modvat/Cenvat credit on duty-paid inputs could not be refused merely because the manufacturer's invoice was initially issued to dealers and later endorsed in favour of the claimant. Where the original invoices were on record, duty payment by the manufacturer was undisputed, and the endorsed invoices evidenced a valid transit transfer of the goods, the document retained evidentiary value for credit purposes. The credit scheme required proof of duty-paid inputs and did not limit entitlement only to an immediate purchaser from the manufacturer. The denial of credit was therefore unsustainable, and the assessee was held entitled to the claimed duty credit.

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Issues: Whether the assessee was entitled to Modvat or Cenvat credit on duty-paid inputs purchased through dealers on the basis of endorsed manufacturer's invoices, even though the manufacturer's invoices were not in the assessee's name.

Analysis: The credit was denied only because the manufacturer's invoices stood in the names of the dealers and had been endorsed in favour of the assessee. The original manufacturer's invoices were on record, the duty on the inputs had been paid by the manufacturer, and the genuineness of those invoices was not doubted. The applicable credit scheme required proof of duty-paid inputs and did not confine credit only to an immediate purchaser from the manufacturer. An endorsed invoice could operate as a valid document of title for goods transferred in transit, and the endorsement did not destroy its evidentiary value for showing duty payment on the inputs.

Conclusion: The assessee was entitled to avail the credit.

Final Conclusion: The denial of credit was unsustainable, and the impugned order was set aside by recognizing the assessee's entitlement to the claimed duty credit.

Ratio Decidendi: Credit on duty-paid inputs cannot be denied merely because the manufacturer's invoice was endorsed by an intermediary purchaser, so long as the endorsed invoice evidences payment of duty and the inputs were used by the claimant.

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