Modvat credit for direct dispatch to job workers upheld where declaration and invoice particulars were properly filed.

Modvat credit could not be denied when inputs were directly sent to job workers without first entering the assessee's factory, because the declaration under Notification No. 84/94-C.E. specifically covered such dispatch and no objection had been raised to it. The invoices named the assessee as buyer and the job workers as consignees, and the Board's circular of 12-9-95 recognised direct supply to job workers with the duplicate invoice copy as sufficient for transport and credit. On those facts, denial of credit was unsustainable and the assessee remained entitled to Modvat credit.

---

---

Issues: Whether Modvat credit could be denied merely because the inputs were sent to the job workers without first being received in the factory, where the assessee had filed the requisite declaration under Notification No. 84/94-C.E. and the invoices named the assessee as buyer with the job workers shown as consignees.

Analysis: The declaration filed under the notification specifically covered supply of raw material to job workers without bringing the goods into the factory as well as after bringing them into the factory, and no objection had been raised by the Revenue to that declaration. The invoices were issued in the assessee's name and showed the job workers as consignees. The Board's circular dated 12-9-95 permitted direct supply of inputs to job workers under such arrangements and treated the duplicate copy of the manufacturer's invoice as sufficient for transport and availment of Modvat credit by the input user.

Conclusion: The denial of Modvat credit was unsustainable and the assessee was entitled to the benefit of credit.

Ratio Decidendi: Where the governing notification and the applicable Board circular permit direct dispatch of inputs to a job worker, and the prescribed declaration and invoicing particulars are in place, Modvat credit cannot be denied solely because the inputs were not first brought into the manufacturer's factory.

---