Modvat credit cannot be denied for mere commercial nomenclature differences when goods and classification otherwise satisfy eligibility conditions.

Modvat credit was held not to be deniable merely because supplier invoices described the inputs as plates, where the goods were in substance flat-rolled mild steel products of thickness not exceeding 5 mm and otherwise satisfied the relevant classification and eligibility requirements. A mere difference in commercial nomenclature, arising from trade practice, could not defeat deemed credit when the nature of the goods and tariff position were correct. On that basis, the assessee was found to have a prima facie case, pre-deposit was waived, and recovery was stayed.

---

---

Issues: Whether deemed Modvat credit could be denied at the stay stage merely because the inputs were described as plates in the supplier's invoices, though the assessee claimed they were steel sheets covered by the deemed credit order.

Analysis: The inputs were admittedly flat-rolled mild steel products of thickness not exceeding 5 mm, and the dispute arose only from the description used in the commercial documents. The order notes that credit cannot be denied merely because of a difference in nomenclature arising from trade practice when the goods and their relevant classification are otherwise correct. Reliance was placed on the earlier decision holding that Modvat credit is not deniable where the inputs are properly described and the duty structure and eligibility under the notification are satisfied. On that basis, the assessee was found to have a prima facie case for waiver of pre-deposit and stay of recovery.

Conclusion: The application was allowed, the pre-deposit was waived, and recovery was stayed.

Ratio Decidendi: Modvat credit cannot be denied solely because of a difference in commercial nomenclature if the nature of the goods and their tariff classification otherwise satisfy the eligibility conditions.

---