Modvat credit cannot be denied for delayed supplier registration when valid invoices and timely registration application are on record.

Modvat credit could not be denied merely because the supplier's registration certificate was issued after the invoices, where the invoices contained the prescribed particulars and the supplier had applied for registration within the relevant time. The Board circular and transitional notifications were read as not requiring registration by the cut-off date, and the cut-off limited only administrative discretion to accept documents. Technical non-compliance without prejudice to revenue was insufficient where the transaction was genuine and the scheme's object was substantially satisfied, so the credit was directed to be granted.

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Issues: Whether Modvat credit could be denied merely because the supplying dealer obtained registration after the invoices were issued, when the invoices otherwise satisfied the prescribed particulars and the dealer had applied for registration before the cut-off date.

Analysis: The dispute turned on the proper construction of the Board circular and the transitional notifications governing acceptance of invoices for Modvat credit. The invoices were issued in July and August 1994, contained the required particulars, and the supplier applied for registration on 29-12-1994, though the certificate was issued on 6-1-1995. The circular did not stipulate that the dealer must obtain registration by 31-12-1994; that date limited the Assistant Collector's discretion to accept prescribed documents. Even if a stricter view were assumed, the Court applied the principle that statutory requirements should not be construed so as to penalise a party who has done all that lay in its power, especially where the transaction is genuine and the object of the Modvat scheme is otherwise fulfilled. Technical breach without prejudice to revenue was held insufficient to deny the substantive credit.

Conclusion: Modvat credit could not be denied on the ground that registration was granted after the invoices were issued; the assessee was entitled to the credit.

Final Conclusion: The impugned orders were quashed and the respondent authorities were directed to grant the disputed Modvat credit, as the denial based solely on the delayed issuance of the supplier's registration was unsustainable.

Ratio Decidendi: Where the prescribed invoices are otherwise valid and the supplier has applied for registration within the relevant time, credit cannot be refused solely because the formal registration certificate is issued later, if the statutory scheme and its object are substantially satisfied.

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