Modvat credit cannot be refused for a mere invoice address defect when duty-paid receipt and manufacture use are verifiable.

Modvat credit cannot be denied solely because the registered dealer was no longer functioning from the invoice address when the duty-paid nature of the inputs, their receipt in the factory and their use in manufacture were otherwise verifiable. Rule 57G, as amended, and the Board circular require credit to be allowed where the substantive conditions are met and the defect is only procedural. On that basis, the denial of credit was held unjustified and was set aside in favour of the assessee.

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Issues: Whether Modvat credit could be denied merely because the registered dealer had stopped functioning from the address mentioned in the invoices, when receipt of inputs, duty payment and their use in manufacture were otherwise verifiable.

Analysis: The credit was disallowed only on the ground that the dealer was not functioning from the invoice address. The remaining particulars in the invoices were not in dispute. Rule 57G, as amended by Notification No. 7/99-CE, indicated that credit should not be denied for a procedural defect where the duty-paid nature of the goods, their receipt in the factory and intended use in manufacture can be verified. The Board circular likewise required enquiry into the duty-paid character of the goods and the supporting documents before denying credit on procedural grounds.

Conclusion: The denial of Modvat credit on the stated ground was not justified and was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the order denying credit was overturned.

Ratio Decidendi: Modvat credit cannot be denied on a mere procedural irregularity in the invoice particulars if the receipt of duty-paid inputs and their use in manufacture are verifiable.

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