Modvat credit on differential duty was allowed despite non-prescribed documentation where duty paid on inputs was proven.

Modvat credit on differential duty paid on inputs was held admissible where the inputs were admittedly duty paid and the credit was limited to the differential duty arising from price variation. Credit could be taken under Rule 57E even though the supporting certificate was issued by the Superintendent of Central Excise and was not a prescribed duty-paying document under the general credit scheme. The Tribunal followed its earlier view that such credit remains available when it reflects duty actually paid on the inputs. The disallowance was therefore unsustainable and credit was allowed in favour of the assessee.

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Issues: Whether Modvat credit on differential duty paid on inputs was admissible under Rule 57E when the credit was supported by a certificate issued by the Superintendent of Central Excise and not by a document prescribed under Rule 57AE.

Analysis: The inputs were admittedly duty paid and credit was confined to the amount of differential duty arising from price variation. The governing principle was that credit of duty actually paid could be taken under Rule 57E even though the particular document relied upon was not one of the prescribed duty-paying documents for the general credit scheme. On the facts, the Tribunal's earlier view treating similar credit as admissible under Rule 57E was followed.

Conclusion: The credit was admissible and the disallowance was unsustainable, in favour of the assessee.

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