Modvat credit cannot be denied to a recipient for the supplier's invoice defect when duty-paying documents support the claim.

Modvat credit on inputs supported by duty-paying invoices could not be denied to the recipient assessee merely because the registered supplier allegedly failed to comply with the invoice or duplicate-copy requirement. Where any defect was attributable to the supplier and not the recipient, credit taken on such documents remained valid. The disallowance was therefore set aside.

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Issues: Whether Modvat credit could be denied to the recipient assessee merely because the supplier allegedly failed to comply with the invoice/duplicate copy requirement.

Analysis: The appellants had received inputs on duty-paying invoices prescribed for Modvat credit. The defect, if any, was attributable to the registered supplier and not to the recipients. Credit taken on the strength of such documents could not be disallowed to the appellants on account of a contravention by the supplier.

Conclusion: Modvat credit was wrongly denied to the appellants and the disallowance was set aside.

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