Modvat credit cannot be denied for technical defects where substantive compliance and use of inputs are verified.

Modvat credit could not be denied on a mere procedural objection where the original dealer invoice had been verified and attested, the supporting documents were defaced, and the inputs were shown as received and used in manufacture. The record established compliance with the prescribed notification and trade notice requirements, so the objection was technical rather than a failure of substantive conditions. On that basis, denial of credit was not justified and the assessee was entitled to the credit.

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Issues: Whether Modvat credit could be denied merely because the inputs were covered by endorsed invoices, when the assessee claimed substantive compliance with the notification and trade notice and the documents were verified, defaced, and accounted for.

Analysis: The procedural objection was examined against the surrounding compliance requirements under the Modvat scheme. The original dealer invoice had been verified and attested by the Superintendent, the accompanying documents were defaced, and the inputs were shown to have been received and utilised in the manufacture of final products. The record disclosed compliance with the prescribed procedure under the notification and trade notice, and the dispute was confined to technical objections rather than any failure of substantive conditions. On that footing, the denial of credit was not justified.

Conclusion: Modvat credit could not be denied on the basis of the procedural objection, and the assessee was entitled to the credit.

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