Modvat credit on stock transfers to a job worker may be allowed where proper invoices support the statutory concept of sale.

Invoices issued for stock transfers or book-adjusted movements to a job worker may satisfy the statutory concept of sale for Modvat credit purposes where the goods are cleared under proper invoices showing duty particulars and related details. The absence of a conventional cash sale or direct monetary consideration does not by itself defeat credit eligibility if the transfer is supported by the prescribed documentation and aligns with earlier accepted practice. On that basis, such transfers were treated as sales within Section 2(h) of the Central Excise Act, 1944, and Modvat credit was available.

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Issues: Whether invoices issued for stock transfers/book adjustments to a job worker could be treated as "sale" within the meaning of Section 2(h) of the Central Excise Act, 1944 for the purpose of availing Modvat credit.

Analysis: The dispute turned on whether the absence of a conventional sale transaction or direct monetary consideration defeated credit eligibility. The Tribunal followed earlier decisions holding that, for Modvat purposes, the prescribed document is the invoice and that transfer of goods under proper documents, including by book adjustments or stock transfer arrangements, may satisfy the statutory concept of sale. On the facts, the goods were supplied to the job worker under invoices showing duty particulars and related details, and prior decisions had already accepted credit in similar situations.

Conclusion: The transfer to the job worker was accepted as sale within Section 2(h), and the assessee was entitled to Modvat credit.

Ratio Decidendi: For Modvat credit, transfer of goods to a job worker under proper invoices and supported by book adjustments can constitute sale within the statutory definition, even in the absence of a conventional cash sale or direct valuable consideration.

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