Modvat credit allowed on TR 6 challans where certificate proved duty payment and linkage to inputs

Modvat credit was held to be available where duty on inputs had been paid through TR 6 challans and the Range Superintendent's certificate established both payment and correlation with the clearances. Rule 57G required proof of duty payment on inputs, but TR 6 challans were recognised as valid payment instruments. Although a challan alone may not identify the specific goods, the certificate supplied the missing link between the duty paid and the inputs received. On that basis, the documentation was treated as sufficient compliance with the Modvat requirement, and credit could not be denied to the assessee.

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Issues: Whether Modvat credit could be denied merely because duty on inputs was paid under TR 6 challans instead of gate passes, where the challans and a certificate from the Range Superintendent established duty payment and correlation with the clearances.

Analysis: The inputs were received against four invoices, the duty amount had been paid under TR 6 challans, and the Range Superintendent had certified both the payment and the fact that gate passes had not been granted during the relevant period. Rule 57G required proof of duty payment on inputs, and TR 6 challans were recognised as an instrument of payment to the Government. Although a TR 6 challan may not by itself contain particulars linking the payment to specific goods, the certificate issued by the Range Superintendent supplied the necessary correlation between the duty paid and the inputs received. In these circumstances, the certificate and the TR 6 challans were treated as sufficient compliance with the Modvat documentation requirement.

Conclusion: Modvat credit could not be denied and was to be extended to the assessee on production of the original certificate of duty payment and the TR 6 challans.

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