Modvat credit cannot be denied for computer-generated invoices lacking pre-printed serial numbers when rules permit running serial numbers.

Modvat credit could not be denied solely because invoices were computer-generated and lacked pre-printed serial numbers. Rule 52A(6) and Rule 57GG(6) of the Central Excise Rules, 1944 required invoices to bear printed serial numbers, but did not require them to be pre-printed or exclude numbers generated by computer. A Board circular clarified that running serial numbers on computer-generated invoices did not violate the rules and instructed officers not to deny credit on that basis. The appellate authority was bound to follow the circular, so denial of credit on that ground was unjustified.

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Issues: Whether Modvat credit could be denied merely because the invoices were computer-generated and did not bear pre-printed serial numbers.

Analysis: Rule 52A(6) and Rule 57GG(6) of the Central Excise Rules, 1944 required invoices to bear printed serial numbers, but did not use the expression "pre-printed" and did not prohibit serial numbers printed by computer. The Board's circular clarified that running serial numbers on computer-generated invoices did not amount to a breach of the rules and directed field officers not to deny Modvat credit on that ground. As the assessee's appeal was decided after the circular, the appellate authority was bound to follow it and allow credit.

Conclusion: Denial of Modvat credit on the sole ground that the invoices were not pre-printed was not justified. The issue was decided in favour of the assessee.

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