Procedural lapses cannot deny Modvat credit where goods were duly received and no misuse or serious breach was shown.

Modvat credit could not be denied merely because the input goods were not re-endorsed with the vehicle number, since the lapse was only procedural. The goods were received in the ordinary course of business, and there was no allegation or finding of misuse, non-receipt at the factory, or serious breach of law or rule. As the objection concerned only a technical endorsement defect by the local Superintendent, the tribunal held that such a procedural irregularity could not defeat substantive credit entitlement. The appellant was therefore entitled to Modvat credit, and the objection based on non-endorsement of the vehicle number was rejected.

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Issues: Entitlement to Modvat credit where the input goods were allegedly not re-endorsed with the vehicle number and the lapse was purely procedural.

Analysis: The goods had been received in the ordinary course of business and there was no allegation or finding of misuse, non-receipt at the factory, or serious violation of law or rule. The only objection was a technical lapse relating to endorsement of the vehicle number by the local Superintendent. In such circumstances, a procedural defect could not defeat an otherwise permissible Modvat benefit, as technical breaches do not justify denial of substantive credit entitlement.

Conclusion: The appellant was entitled to Modvat credit and the objection based on non-endorsement of the vehicle number was rejected.

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