Modvat credit cannot be denied for minor weighment variation where duty-paid receipt and use of inputs are otherwise established.

Modvat credit could not be denied merely because the input weight recorded at purchase differed from the weight noted at the factory of receipt and use. The discrepancy was treated as a normal weighment variation between different machines and weighbridges, and the statutory recognition of permissible error in declared weights supported that view. Where the duty-paid character of the inputs and their receipt and use in manufacture were not in dispute, a minor weight difference was not a valid basis to disallow credit. The department's objection therefore failed, and the credit remained admissible.

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Issues: Whether Modvat credit could be denied merely because the weight of the inputs at the place of purchase differed from the weight recorded at the factory of receipt and use.

Analysis: The discrepancy in weight was held to be explainable as a normal margin of error in weighment between different machines and weighbridges. The statutory framework under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 recognises the existence of permissible error in weight declarations, reinforcing that minor variation in weighment does not by itself establish non-receipt or non-use of the inputs. The duty-paid nature of the goods and their use in manufacture were not shown to be in dispute, and the difference in weight was not treated as a valid basis to disallow credit.

Conclusion: Modvat credit could not be denied solely on the ground of difference in weight between the place of procurement and the factory of receipt; the objection failed against the assessee.

Final Conclusion: The department's challenge failed, and the credit could not be disallowed on the basis of minor weighment variation where duty-paid receipt and use of inputs were not disputed.

Ratio Decidendi: A minor discrepancy in weight between different stages of receipt and use, attributable to normal weighment error, is not by itself a ground to deny Modvat credit when the duty-paid character and use of the inputs are otherwise established.

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