Modvat credit on imported capital goods survives a mere documentation defect, and later circulars cannot defeat completed transactions.

Substantive eligibility to Modvat credit on imported capital goods could not be denied merely because the import documents named the holding firm, where the goods were actually received and installed in the appellants' unit and that factual position was verified before credit was taken. The procedural discrepancy in documentation did not override the underlying entitlement. A later Board circular could not be applied retrospectively to transactions completed before its issuance. Modvat credit was therefore admissible, and the Revenue's objection was rejected.

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Issues: Whether Modvat credit on imported capital goods was admissible where the goods were imported in the name of the holding firm but received and installed in a unit of that firm, and whether a later Board circular could be applied retrospectively to deny the credit.

Analysis: The capital goods were imported before the Board circular was issued, and the factual record showed that the importer and the receiving unit were part of the same partnership structure. The original authority had verified that the goods were actually received and installed in the appellants' premises, that the unit was linked to the importing firm, and that the credit had been taken only after such verification. In these circumstances, a procedural discrepancy in the name appearing on the import documents could not override the substantive entitlement to credit. A later circular could not be applied to transactions completed earlier when no such procedure governed the case.

Conclusion: Modvat credit was admissible and the Revenue's objection was rejected.

Final Conclusion: The appeal failed, and the assessee's entitlement to Modvat credit was upheld despite the procedural objection based on the import documentation and the later circular.

Ratio Decidendi: Substantive eligibility to Modvat credit cannot be denied on a merely technical procedural irregularity when the receipt and installation of capital goods are duly verified and a later administrative circular cannot be given retrospective effect to defeat an earlier transaction.

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