Modvat credit on original invoice requires prior sanction where duplicate copy is lost in transit; non-compliance defeats the claim.

Modvat credit on the original copy of an invoice was permitted only where the duplicate copy had been lost in transit and only after the Jurisdictional Assistant Commissioner was satisfied and granted sanction. Credit had been taken on the original invoice without obtaining that prior sanction, even though loss of the duplicate was claimed. The mandatory condition in Rule 57G was therefore not complied with, and the earlier Larger Bench interpretation of the rule was followed. The assessee was not entitled to avail the credit in those circumstances.

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Issues: Whether Modvat credit could be availed on the strength of the original copy of the invoice without first satisfying the Jurisdictional Assistant Commissioner that the duplicate copy had been lost in transit and without obtaining his sanction.

Analysis: Rule 57G, as applicable during the material period, permitted credit on the original copy of the invoice only where the duplicate copy had been lost in transit and only subject to the satisfaction and sanction of the Assistant Commissioner. The factual position was undisputed that the credit was taken on the original invoice without prior sanction on the plea that the duplicate had been lost. The mandatory requirement had therefore not been complied with, and the earlier Larger Bench view on the same rule correctly governed the matter.

Conclusion: The assessee was not entitled to Modvat credit on the original invoice without prior sanction of the Jurisdictional Assistant Commissioner; the finding is against the assessee.

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