Modvat credit on duty-paid inputs through a job worker remains available when identity and document nexus are preserved.

Modvat credit was held admissible on duty-paid inputs sent through a job worker for slitting and repacking, because the inputs retained their identity as the same commodity in reduced form and the duty-paying documents established continuity of nexus with the final product. Receipt through the job worker, rather than direct delivery from the supplier, was treated as immaterial where the goods had already suffered duty and endorsement of the gate passes confirmed their movement. The change in weight and packing did not destroy identity, so credit could not be denied merely because the inputs were not received in original packing.

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Issues: Whether Modvat credit was admissible where duty-paid inputs were sent through a job worker for slitting and repacking and received by the manufacturer under endorsed gate passes, despite the goods not being received in the original packing.

Analysis: The decisive factors were that the inputs had already suffered duty, the duty-paying documents accompanied the goods, and the processed inputs remained the same commodity in reduced form. The source of receipt was held not to be material where the nexus between the duty-paid input and the final product was established. The change in weight and form caused by slitting did not destroy the identity of the goods, and endorsement by the job worker was treated as sufficient to establish continuity of identity. The cited trade notice and the prior appellate ruling supported the view that Modvat credit cannot be denied merely because the inputs were received through a job worker rather than directly from the supplier.

Conclusion: Modvat credit was admissible and the objection to its availment was rejected.

Ratio Decidendi: Modvat credit cannot be denied where duty-paid inputs retain their identity after processing through a job worker and the duty-paid documents establish the nexus between the input received and the final product, even if the inputs are not received directly from the supplier in original packing.

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