Modvat credit cannot be denied for procedural documentary defects when duty-paid returned inputs are otherwise verifiable.

Modvat credit could not be denied merely because returned inputs were supported by documents not issued in the assessee's name, where the same inputs were shown to have been removed on duty and later brought back to the factory. The absence of an ideal endorsement or strict D-3 compliance was treated as a procedural irregularity, not a substantive bar to credit, because the receipt of goods could still be verified from the available records. On that basis, the assessee was not to be penalised for the documentary defect and credit was allowed.

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Issues: Whether Modvat credit could be denied when inputs removed on duty under Rule 57F(1)(ii) of the Central Excise Rules, 1944 were returned to the factory and the supporting documents were not in the assessee's name.

Analysis: The return of the same inputs was evidenced by the covering document and the factual position showed that duty had already been paid on removal. The objection that the invoice was not in the assessee's name was treated as a procedural difficulty, not as a substantive defect defeating credit. In the circumstances, the receipt of goods could be verified from the available records and the assessee was not to be penalised for the absence of an ideal endorsement or a formal D-3 procedure.

Conclusion: Modvat credit could not be denied solely on the ground that the documents were not in the assessee's name, and the issue was answered in favour of the assessee.

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