Modvat credit cannot be refused for minor invoice-format defects when duty-paid inputs and manufacture are undisputed.

Modvat credit could not be denied merely because dealers' invoices did not strictly follow the prescribed colour scheme or because the invoice number was handwritten where the series was otherwise pre-printed. The note treats these defects as minor procedural irregularities, since receipt of the inputs, their duty-paid nature, their use in manufacture, and duty payment on the final product were not disputed. In that setting, hyper-technical objections to invoice format were insufficient to defeat the substantive credit claim, and the credit benefit was allowed.

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Issues: Whether Modvat credit could be denied on the ground that the dealers' invoices did not strictly comply with the prescribed colour scheme and pre-printed serial-number format under the relevant notification and rule.

Analysis: The only substantive dispute concerned the validity of the invoices used for availing Modvat credit. The invoices were examined in the context of the recently introduced colour requirement and the objection that the serial numbers were handwritten rather than fully pre-printed. It was found that the invoice series was pre-printed and only the actual invoice number was handwritten. The inputs' receipt, duty-paid nature, use in manufacture, and duty payment on the final product were not disputed. In such circumstances, a minor procedural irregularity in the invoice format could not justify denial of the substantive credit benefit.

Conclusion: The denial of Modvat credit on these hyper-technical grounds was set aside and the assessee's claim was allowed.

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