Modvat credit cannot be denied for an invoice defect when duty-paid inputs, receipt, and manufacture use are established.

Modvat credit could not be denied solely because an invoice was computer-generated with the assessee's name handwritten, where receipt of duty-paid inputs, payment of duty, and use of the inputs in manufacture were undisputed. The amended Rule 57-G and the Board's circular directed that credit should not be refused for procedural lapses when enquiries confirm the duty-paid nature of the goods and their use in the factory. On that basis, the invoice defect was treated as a procedural irregularity, and denial of credit was held unsustainable.

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Issues: Whether Modvat credit could be denied merely because the invoice was computer-generated with the appellant's name handwritten, when receipt of duty-paid inputs, payment of duty, and use in manufacture were undisputed.

Analysis: The receipt of duty-paid inputs in the factory and their use in the manufacture of final products was not in dispute. Rule 57-G had been amended so that credit was not to be denied merely because all particulars were not mentioned in the document. The Board's circular further directed that credit should not be refused on procedural lapses where enquiries confirm the duty-paid nature of the goods and their use in the factory. In that context, the defect in the invoice was only a procedural irregularity.

Conclusion: Denial of Modvat credit was unsustainable and the issue was decided in favour of the assessee.

Ratio Decidendi: Modvat credit cannot be denied for a procedural defect in the invoice when the duty-paid nature, receipt, and use of the inputs are established.

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