Modvat credit on plant installation steel structures and original invoices was upheld despite technical objections.

Modvat credit was treated as admissible on M.S. structures used for installation of factory plant, because the structures were used for plant installation for manufacture and not for civil construction; steel structures, plates, angles and channels were recognised as eligible capital goods under Rule 57Q. Credit was also not denied merely because it was taken on the original invoice when the duplicate copy was missing, since the goods were duty paid, received and used in or in relation to manufacture, and the credit was claimed before the amendment of Rule 57T on 23 July 1996, when original invoices were permissible. The objection was held to be technical and insufficient to refuse credit.

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Issues: (i) Whether Modvat credit was admissible on M.S. structures used for installation of the factory plant; (ii) Whether Modvat credit could be denied on the ground that credit was taken on the original invoices in the absence of the duplicate copy.

Issue (i): Whether Modvat credit was admissible on M.S. structures used for installation of the factory plant.

Analysis: The structures were found to have been used for installation of the plant for manufacture of VP sugar and not for civil construction. The applicable law treated capital goods such as plates, angles, channels and steel structures as eligible for Modvat credit under Rule 57Q of the Central Excise Rules. The reasoning that denied credit in a case involving use of structures only for fabrication or construction was distinguished on facts.

Conclusion: Modvat credit on the M.S. structures was admissible and the finding was in favour of the assessee.

Issue (ii): Whether Modvat credit could be denied on the ground that credit was taken on the original invoices in the absence of the duplicate copy.

Analysis: The duty paid goods were admittedly received and used in or in relation to manufacture, and an application and affidavit had been filed explaining loss of the duplicate copy. The credit was taken prior to the amendment of Rule 57T of the Central Excise Rules on 23 July 1996, when credit on the original invoice was permissible. The objection was therefore only technical and did not justify denial of credit.

Conclusion: Modvat credit could not be denied on the invoice objection and the finding was in favour of the assessee.

Final Conclusion: The order allowing Modvat credit on both disputed counts was sustained, and the Revenue's challenge failed.

Ratio Decidendi: Where duty paid goods are received and used in relation to manufacture, Modvat credit cannot be denied on a purely technical objection, and steel structures used for installation of plant may qualify as capital goods for credit purposes.

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