Duty credit on invoices and captive storage tanks: despatch evidence and in-factory use supported admissibility.

Duty credit cannot be denied merely because invoices were not formally endorsed in the assessee's name when they clearly evidenced despatch to the assessee and receipt of the goods was undisputed; such documents were treated as valid duty-paid records, making the credit admissible. Storage tanks manufactured in the factory and used captively within the same factory were also treated as capital goods under Rule 57Q and, on that basis, fell within Notification No. 67/95-C.E., so the related credit was admissible. The dispute credit was therefore available, and the adverse orders and penalty were set aside.

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Issues: (i) whether credit could be denied on invoices not standing in the assessee's name when the invoices evidenced despatch of the goods to the assessee; and (ii) whether storage tanks manufactured in the factory and used captively were capital goods eligible for exemption.

Issue (i): whether credit could be denied on invoices not standing in the assessee's name when the invoices evidenced despatch of the goods to the assessee.

Analysis: The invoices in question showed despatch to the assessee, and therefore they were treated as valid duty-paid documents rather than endorsed invoices. Since receipt of the goods was not in dispute, the Tribunal applied its earlier view that such documents are sufficient for credit.

Conclusion: The denial of credit on this count was unsustainable and the credit was admissible to the assessee.

Issue (ii): whether storage tanks manufactured in the factory and used captively were capital goods eligible for exemption.

Analysis: Storage tanks manufactured in the assessee's factory and used within the factory were held to fall within the definition of capital goods under Rule 57Q. Once so classified, they were covered by the exemption under Notification No. 67/95-C.E.

Conclusion: The storage tanks qualified as capital goods and the credit related to them was admissible to the assessee.

Final Conclusion: The entire credit in dispute was held to be available, and the orders denying credit and imposing penalty were set aside.

Ratio Decidendi: Where the invoices clearly evidence despatch of duty-paid goods to the assessee and receipt is undisputed, credit cannot be denied merely because the invoices are not formally endorsed in the assessee's name; goods manufactured in the factory and used captively may qualify as capital goods for the relevant exemption.

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