Modvat credit cannot be denied for a minor invoice defect when duty payment and use in manufacture are undisputed.

Modvat credit on capital goods could not be denied merely because the dealer's invoice lacked pre-authentication where the duty-paid character of the goods and their use in manufacture were undisputed. A binding Board circular required credit not to be refused for minor procedural defects in declarations or duty-paying documents unless there was doubt that duty had not been paid or that the goods were not used in manufacture. The circular was applicable to pending matters, and the Tribunal's earlier approach supported acceptance of the invoice despite the defect. On that basis, the credit was held admissible in favour of the assessee.

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Issues: Whether Modvat credit on capital goods could be denied merely because the dealer's invoice was not pre-authenticated, despite the duty-paid nature of the goods and their use in manufacture not being in dispute.

Analysis: The Board's circular directed that Modvat credit should not be refused for minor procedural defects in declarations or duty-paying documents unless there was doubt that the goods had not suffered duty or were not used in manufacture. The circular had already been held applicable to pending matters, and the Tribunal's earlier decision applying that circular had held that an invoice should not be rejected for want of pre-authentication where duty payment and use of the goods were undisputed. In view of the binding circular, the Revenue could not contend otherwise.

Conclusion: The credit was not liable to be denied on the ground of absence of pre-authentication, and the issue was decided in favour of the assessee.

Ratio Decidendi: Modvat credit cannot be denied for a minor procedural defect in the duty-paying document when the duty-paid nature of the goods and their use in manufacture are undisputed, particularly where a binding Board circular directs that such credit not be refused on that ground.

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