Valid manufacturer invoice supports Modvat credit; extended limitation fails without proved suppression or misrepresentation.

A manufacturer's invoice remained a valid Modvat document where polyester fibre consignments were manufactured under a job contract, routed through intermediary parties, and invoiced with the appellant shown as consignee. Rule 57G(3)(a) was satisfied, and the extra payment to an intermediary did not invalidate credit. The recovery notice also failed because the department did not establish suppression or misrepresentation; without those facts, extended limitation under Rule 57-I could not be invoked. The appeal succeeded on both merits and limitation, and the impugned order was set aside.

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Issues: (i) whether the manufacturer's invoice issued for the polyester fibre consignments was a valid document for availing Modvat credit; and (ii) whether the show cause notice for recovery of credit was barred by limitation.

Issue (i): whether the manufacturer's invoice issued for the polyester fibre consignments was a valid document for availing Modvat credit.

Analysis: The commercial arrangement showed that the goods were manufactured by Terene under a job contract with Reliance, dispatched to the appellant pursuant to the purchase order routed through Nagani, and invoiced by the manufacturer with the appellant shown as consignee. Rule 57G(3)(a) permitted credit on the basis of a manufacturer's invoice issued under Rule 57A. The additional payment to Nagani and the routing of the transaction through intermediary parties did not affect the validity of the invoice or the eligibility to credit.

Conclusion: The invoice was a valid document and Modvat credit was correctly taken, in favour of the assessee.

Issue (ii): whether the show cause notice for recovery of credit was barred by limitation.

Analysis: The facts relied upon by the department did not establish suppression or misrepresentation. The transaction structure did not require separate disclosure to the department, and the ingredients necessary to invoke extended limitation were absent. The notice issued under Rule 57-I was therefore not sustainable on the ground alleged by the department.

Conclusion: The demand was barred by limitation and the finding on suppression failed, in favour of the assessee.

Final Conclusion: The appeal succeeded on both merits and limitation, and the impugned order was set aside.

Ratio Decidendi: A manufacturer's invoice satisfying Rule 57G(3)(a) remains a valid Modvat document despite intermediary commercial routing, and extended limitation cannot be invoked absent proved suppression or misrepresentation.

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