Modvat credit cannot be denied for missing invoice pre-authentication when procedural conditions are otherwise met.

Modvat credit cannot be denied merely because invoices lacked pre-authentication where the prescribed notification-based procedure was followed and the inputs were shown to have originated from a public sector undertaking. The objection under Rule 57A(7) was only procedural, and the duty-paid character of the inputs and the proper issue of invoices were not in dispute. On those facts, the procedural lapse did not invalidate the credit claim, and the assessee's entitlement was sustained.

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Issues: Whether Modvat credit could be denied for want of pre-authentication of invoices when the inputs originated from a public sector undertaking and the procedural requirements under the relevant notifications were complied with.

Analysis: The Revenue's objection rested solely on the absence of pre-authentication under Rule 57A(7). The order under challenge had recorded that the supplier was a public sector undertaking and that the assessee was exempted from pre-authentication. It had also relied on the relevant notifications and the cited Bombay High Court decision. No dispute remained as to the duty-paid character of the inputs or the fact that the invoices were issued by the dealer in the prescribed manner. In these circumstances, the procedural objection did not invalidate the claim for credit.

Conclusion: The denial of Modvat credit was not justified, and the assessee's claim was sustained.

Ratio Decidendi: Where the prescribed notification-based procedure is followed and the inputs are shown to have originated from a public sector undertaking, Modvat credit cannot be denied merely for lack of pre-authentication of invoices.

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