Modvat credit on original invoices cannot be denied on grounds outside the rule once duplicate loss in transit is established.

Rule 57G(2A) permitted Modvat credit on the original invoice where the duplicate copy was lost in transit, subject to the Assistant Collector's satisfaction. The only material enquiry was whether the duplicate invoice had in fact been lost, and no adverse finding existed on that point. Denial of credit on collateral grounds such as prior utilisation of inputs, non-availability for physical verification, or other procedural objections had no legal basis under the rule. The denial of Modvat credit was therefore unsustainable and was set aside, with consequential relief to the assessee.

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Issues: Whether Modvat credit could be denied on original invoices where the duplicate copy was stated to have been lost in transit, and whether denial could rest on grounds not contemplated by Rule 57G(2A) of the Central Excise Rules, 1944.

Analysis: Rule 57G(2A) permitted credit on the basis of the original invoice when the duplicate copy was lost in transit, subject to the satisfaction of the Assistant Collector. The only material enquiry under the rule was whether the duplicate invoice had in fact been lost. In the absence of any adverse finding on that aspect, denial of credit on collateral grounds such as prior utilisation of inputs, non-availability for physical verification, or alleged procedural lapse had no legal basis under the rule.

Conclusion: The denial of Modvat credit was unsustainable and was set aside in favour of the assessee.

Final Conclusion: The assessee was entitled to Modvat credit on the original invoices, and the impugned orders were annulled with consequential relief.

Ratio Decidendi: Where a rule specifically permits credit on the original invoice upon loss of the duplicate copy in transit, the authority cannot deny credit on grounds outside the rule once the requisite satisfaction regarding loss is not negatived.

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