Modvat credit cannot be denied for computer-generated invoices with running serial numbers where a binding circular permits them.

Modvat credit could not be denied merely because computer-generated invoices carried running serial numbers instead of pre-printed serial numbers, as the Board circular expressly treated such numbering as compliant. The circular was binding on departmental authorities, so the excise demand based on invoice format alone was not sustainable. On that basis, dismissal of the appeal for alleged non-compliance with the pre-deposit order was also unsustainable where the dispute was fully covered by the circular.

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Issues: Whether Modvat credit could be denied solely because computer-generated invoices did not bear pre-printed serial numbers, and whether the appeal could be dismissed for non-compliance with the pre-deposit order despite the binding Board circular.

Analysis: The demand proceeded on the premise that invoices bearing computer-generated serial numbers, instead of pre-printed serial numbers, were invalid under the relevant excise rules. The Board's circular expressly stated that computer-generated running serial numbers did not violate the rule requirement and that Modvat credit should not be denied on that ground. Instructions issued by the Board were binding on the departmental authorities, and the dispute was fully covered by the circular. In such circumstances, there was no justification to sustain the dismissal of the appeal on the ground of non-compliance with the stay order.

Conclusion: Modvat credit could not be denied on the ground of absence of pre-printed serial numbers on computer-generated invoices, and the dismissal of the appeal for non-compliance with pre-deposit was unsustainable.

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