Modvat credit on manufacturer's invoice upheld despite consignment agent challans not being modvatable documents.

Modvat credit could not be denied merely because the goods were routed through consignment agents, where the credit was actually taken on the basis of the original manufacturer's invoice. The invoice was an admitted modvatable document and contained the challan numbers used for dispatch, so the objection that credit was claimed only on non-modvatable challans was unsustainable on the facts. The denial of credit was therefore not justified, and the assessee was entitled to the credit on the manufacturer's invoice.

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Issues: Whether Modvat credit could be denied on the ground that the challans issued by the consignment agents were not modvatable documents, when the credit was in fact taken on the basis of the manufacturer's invoice.

Analysis: The evidence showed that the goods were received through the consignment agents, but the credit was taken on 31-12-1993 on the basis of the original manufacturer's invoice. The invoice itself carried the challan numbers under which the consignment agents had dispatched the goods, and the invoice was an admitted modvatable document. The objection that credit was taken only on the challans was therefore not sustainable on the facts.

Conclusion: The denial of Modvat credit was not justified and the assessee was entitled to the credit on the manufacturer's invoice.

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