Modvat credit cannot be denied when duty-paid goods are covered by invoices issued as original for buyers and procedure is complied with.

Modvat credit could not be denied where duty-paid goods were received under invoices issued as original for buyers and the assessee showed that the duplicate copies were lost. Compliance with the procedure prescribed in Trade Notice No. 117/94 of the Chandigarh Commissionerate supported admissibility of credit. Since the receipt of duty-paid goods and the genuineness of the invoices were not in dispute, denial of credit solely because the available invoices were photostat copies marked as original for buyers was unsustainable. Credit was held admissible and consequential relief followed.

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Issues: Whether Modvat credit could be denied where the invoices were marked as original for buyers, the duplicate copies were stated to be lost, and the procedure under Trade Notice No. 117/94 of Chandigarh Commissionerate had been complied with.

Analysis: The duty-paid character of the goods and their receipt through the invoices in question were not disputed. The invoices were shown to have been issued by the supplier as original for the buyers, and the appellants established loss of the duplicate copies. The adjudicating authority had allowed credit on the basis that the procedure prescribed in Trade Notice No. 117/94 of Chandigarh Commissionerate was followed. In these circumstances, denial of credit merely on the ground that the invoices were photostat copies marked as original for buyers was not justified.

Conclusion: Modvat credit was held admissible and the denial of credit was unsustainable, in favour of the assessee.

Final Conclusion: The disallowance of Modvat credit was set aside and the appellants were held entitled to consequential relief.

Ratio Decidendi: Where duty-paid goods are received under invoices issued as original for buyers and the prescribed procedural requirements are complied with, Modvat credit cannot be denied solely because the duplicate invoice is lost or the available invoice is a copy marked as original for the buyer.

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