Modvat credit transit by rail siding to factory allowed despite missing truck numbers on invoices, with recovery stayed.

Modvat credit was not denied where inputs moved by railway wagons to a siding and were then carried by truck to the factory over a short distance. The absence of truck numbers in the invoices was not treated as a defect requiring denial of credit or insistence on a fresh invoice, because no separate Board procedure was shown for such transit and the departmental procedure relied on was inapplicable on these facts. The appellant was therefore found to have a strong prima facie case, and recovery was stayed by waiving pre-deposit during the appeal.

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Issues: Whether the appellant had made out a prima facie case for unconditional waiver of pre-deposit and stay of recovery in relation to the demand raised on reversal of Modvat credit, where the inputs moved from the rail siding to the factory by truck after receipt by railway wagons.

Analysis: The inputs were first transported from the supplier's premises by railway wagons to the nearest railway siding and only thereafter carried by trucks over a short distance to the factory. In that situation, the absence of truck numbers in the invoices was not treated as a defect requiring denial of credit or insisting on a fresh invoice. No separate procedure was shown to have been prescribed by the Board for such transit from the siding to the factory, and the procedure relied upon by the department was held inapplicable on these facts.

Conclusion: The appellant was held to have a good prima facie case, and unconditional stay of recovery was granted by waiving the demand and penalty during pendency of the appeal.

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