Modvat credit on original invoices required prior factual satisfaction that duplicate transporter copies were lost in transit.

Modvat credit under Rule 57G(6) could be allowed on original invoices only if the jurisdictional Assistant Commissioner first satisfied himself that the duplicate transporter copies had been lost in transit, after considering the assessee's supporting material, including the representation and affidavit. The adjudicating authority failed to record any finding on that factual prerequisite and treated the case only as one of credit taken without prior permission. Because the loss of duplicate invoices and the admissibility of credit were distinct questions, the denial of credit could not stand and the matter had to be reconsidered with a speaking finding on loss and eligibility.

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Issues: Whether Modvat credit could be denied without the adjudicating authority first recording a finding on the alleged loss of the duplicate transporter copies of invoices and, on that basis, determining whether credit on original invoices could be permitted under Rule 57G(6).

Analysis: Rule 57G(6) permitted Modvat credit on the basis of the original invoice where the duplicate copy was lost in transit, but only subject to the satisfaction of the jurisdictional Assistant Commissioner. That satisfaction had to be reached after considering the assessee's supporting material, including the representation and affidavit filed in support of the claim. The adjudicating authority did not address the factual question whether the duplicate copies had in fact been lost in transit and instead proceeded only on the ground that credit had been taken without prior permission. The two questions were distinct. Since the preliminary factual satisfaction required by the rule was never recorded, the orders of the lower authorities could not stand.

Conclusion: The denial of Modvat credit was unsustainable, and the matter was required to be reconsidered by the adjudicating authority after recording a speaking finding on loss of the duplicate invoices and the admissibility of credit.

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