Substantive compliance for Modvat credit accepted where invoice declaration and payment records proved duty on inputs.

Deemed Modvat credit under Notification No. 58/97-C.E. was treated as admissible where the invoice contained a declaration that appropriate duty had been paid on the inputs, and the assessee supported that declaration with PLA records and TR-6 challans. The notification's evidentiary requirement was held to be met by contemporaneous payment records, even though a certificate from the jurisdictional Superintendent was not produced. The operative principle is that substantive compliance with the notification, backed by credible documentary proof of duty payment, satisfies the condition for credit and the denial of credit is unsustainable.

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Issues: Whether deemed Modvat credit under Notification No. 58/97-C.E. dated 30-8-1997 was admissible when the invoice contained a declaration of duty payment and the assessee produced PLA and TR-6 challans instead of a certificate from the jurisdictional Superintendent.

Analysis: The condition in the notification required a declaration in the invoice that appropriate duty of excise had been paid on the inputs. That declaration was found to be present. The notification also contemplated proof of duty payment through certification, but the assessee produced PLA records and TR-6 challans showing periodic payment and bank deposit of duty. On that basis, the evidentiary requirement was held to have been satisfied and the assessee was found to have complied with the notification in substance.

Conclusion: Deemed Modvat credit was admissible and the denial of credit was unsustainable.

Ratio Decidendi: Where the notification condition requires proof of duty payment on inputs, substantive compliance evidenced by a proper invoice declaration supported by contemporaneous payment records is sufficient.

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