Modvat credit on original invoice remained admissible after loss of duplicate copy and genuine invoice endorsement for diverted inputs.

Modvat credit was treated as admissible where the duplicate invoice was lost in transit and credit was taken on the original invoice, and where endorsement of the invoice supported diversion of inputs to another unit after closure of the factory named in the invoice. The factual satisfaction recorded by the Assistant Commissioner on loss of the duplicate and the genuine business explanation was not displaced by the appellate authority with reasons. The objections were therefore procedural only and could not justify denial of credit; the Commissioner (Appeals) order was set aside and the credit allowance restored.

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Issues: Whether Modvat credit was admissible where the credit was taken on the basis of the original invoice after loss of the duplicate copy in transit, and where the invoice was endorsed because the inputs were diverted to another unit on closure of the factory named in the invoice.

Analysis: The Assistant Commissioner had recorded satisfaction regarding the loss of the duplicate invoice and treated the endorsement of the invoice in favour of the receiving unit as arising from a genuine business situation caused by closure of the original unit. The appellate authority reversed that order without displacing those factual findings or giving reasons to negate the satisfaction already recorded. On the facts found, the objections were only procedural and did not justify denial of the credit.

Conclusion: Modvat credit was admissible and the Revenue's objection was rejected. The order of the Commissioner (Appeals) was set aside and the Assistant Commissioner's order allowing the credit was restored.

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