Modvat credit on depot-issued invoices upheld where notification recognised depot documents as valid duty-paying records.

Invoices and challans issued by a manufacturer's depots were recognised as valid duty-paying documents for Modvat credit under Rule 57G, because Notification No. 32/94-C.E. (NT) expressly accepted invoices issued from the factory or depot. The departmental Trade Notices could not override the notification, and the appellate orders allowing credit on depot-issued documents were found to suffer from no legal infirmity. Modvat credit was therefore available on the basis of the depot invoices/challans.

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Issues: Whether invoices/challans issued by the depots of the manufacturer were valid duty-paying documents for the purpose of availing Modvat credit under Rule 57G of the Central Excise Rules, 1944.

Analysis: The depots in question were admittedly depots of the manufacturer of furnace oil. Notification No. 32/94-C.E. (NT) recognized invoices issued by a manufacturer from the factory or his depot as duty-paying documents. The Trade Notices relied upon by the department were found to be irrelevant in the face of the notification. The appellate orders allowing credit on the strength of depot-issued invoices/challans were found to suffer from no legal infirmity.

Conclusion: The invoices/challans issued by the manufacturer's depots were valid duty-paying documents for Modvat credit, and the department's appeals failed.

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