Modvat credit cannot be denied for minor invoice irregularities when duty-paid inputs and eligibility are undisputed.

Modvat credit cannot be denied where duty-paid inputs were received by an eligible manufacturer and substantive entitlement was undisputed, even if the endorsed invoice contained procedural defects. The material requirements for credit were satisfied, and the only dispute concerned the method of transfer through invoice endorsement. In such circumstances, inconsequential documentation irregularities do not defeat credit. The denial of Modvat credit was therefore unjustified and the issue was decided in favour of the assessee.

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Issues: Whether Modvat credit could be denied on the ground of procedural infirmities in the endorsed invoice, when the receipt of duty-paid inputs and the assessee's eligibility to credit were not in dispute.

Analysis: The receipt of the inputs, payment of duty on them, and the assessee's eligibility to avail credit were accepted. The only controversy related to the procedure adopted for transfer of the goods through endorsement of the invoice. Where the substantive requirements for Modvat credit are satisfied and the credit relates to duty-paid inputs received by an eligible manufacturer, credit cannot be denied merely for inconsequential defects in documentation or procedure.

Conclusion: The denial of Modvat credit was unjustified and the issue was decided in favour of the assessee.

Ratio Decidendi: Modvat credit cannot be refused for mere procedural irregularities in documentation when substantive entitlement, receipt of duty-paid inputs, and absence of prior credit availment are established.

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