Modvat credit remains admissible despite invoice being in the head office's name when factory receipt and use are undisputed.

Modvat credit cannot be denied merely because the input invoice stood in the name of the head office or branch office when receipt and use of the goods in the factory are undisputed. The Tribunal treated such misdescription and non-endorsement as a curable procedural irregularity, and held that procedural lapses without mala fides do not defeat credit under the Modvat scheme's anti-cascading purpose. On those facts, the invoice remained an admissible document and credit was allowed.

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Issues: Whether Modvat credit could be denied merely because the invoice for the inputs stood in the name of the head office and not the factory, when receipt and use of the inputs in the factory were not disputed.

Analysis: The Tribunal held that the Modvat scheme is intended to avoid cascading of taxes and that invoice description in the name of the head office or branch office is only a procedural matter. Where the inputs covered by the invoice are actually received in the factory and used in the manufacture of finished goods, procedural lapses without mala fides do not justify denial of credit. Non-endorsement by the head office or branch office was treated as a curable procedural irregularity, and the Board circular could not defeat credit on the undisputed facts of receipt and utilisation.

Conclusion: Modvat credit was held admissible and the invoice was not an ineligible document; the disallowance was set aside in favour of the assessee.

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