Modvat credit on petroleum inputs upheld where dealer-invoice particulars were inapplicable to non-dealer depot invoices.

Modvat credit on LDO and RFO was held admissible where the goods were accepted as inputs used in or in relation to manufacture. The Tribunal found that the Commissioner (Appeals) could not reopen that merits finding in the absence of a Revenue challenge. It further held that invoice particulars prescribed for dealer invoices could not be insisted upon for depot invoices issued by BPCL, since the depots were not dealers and the invoices otherwise evidenced duty payment on bonded excisable petroleum products. On that basis, denial of credit for want of dealer-style particulars and depot registration was unsustainable.

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Issues: Whether Modvat credit on LDO and RFO was admissible when the goods were used in relation to manufacture, and whether credit could be denied because the invoices issued by the oil company depots did not contain the particulars prescribed for dealers and the depots were not registered as dealers.

Analysis: The Assistant Commissioner had accepted on merits that the impugned items were used in or in relation to the final products and were inputs, but credit was denied mainly for alleged non-compliance with invoice particulars and depot registration requirements. The Tribunal held that, once the original authority had accepted the goods as inputs, the issue could not be reopened by the Commissioner (Appeals) in the absence of a Revenue challenge. It further held that the particulars prescribed under the notifications were intended for invoices issued by dealers, whereas BPCL depots were not dealers. The invoices reflected duty payment on bonded excisable petroleum products at the depots, and there was therefore no valid basis to deny Modvat credit on that ground.

Conclusion: Modvat credit on the impugned LDO and RFO was admissible, and the denial based on invoice particulars and depot registration was unsustainable.

Final Conclusion: The lower orders were set aside and the assessee's entitlement to Modvat credit was upheld.

Ratio Decidendi: Where inputs are accepted on merits, Modvat credit cannot be denied merely for absence of particulars in invoices issued by non-dealer depots when the prescribed particulars are meant for dealer invoices and the duty payment is otherwise evidenced.

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