Modvat credit cannot be denied for missing duplicate invoice when receipt and duty payment on capital goods are proven.

Modvat credit on capital goods cannot be denied solely because the duplicate invoice is unavailable where receipt of the goods in the factory and duty payment are otherwise established. The record here showed receipt through transport documents, goods receipt records, sales tax permit, affidavits and departmental correspondence, and those factual findings were not rebutted by contrary evidence. A show cause notice based only on circumstantial material, without proper verification, was held unsustainable. On that basis, the duplicate invoice defect was treated as insufficient to disallow credit, and the Revenue's challenge failed.

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Issues: Whether Modvat credit could be denied on the ground of non-production of the duplicate invoice when receipt of the capital goods in the factory and duty payment were otherwise established.

Analysis: The record showed receipt of the capital goods in the factory through transport documents, goods receipt records, sales tax permit, affidavits and departmental correspondence. The findings that the goods had in fact been received and utilised were not shown to be displaced. The Department did not controvert the Commissioner (Appeals)'s factual findings with any contrary evidence, and the notice based only on circumstantial material was held to be unsustainable where proper verification had not been made before its issuance. In those circumstances, the loss of the duplicate invoice did not justify denial of the credit.

Conclusion: Modvat credit was admissible and the Revenue's challenge failed.

Ratio Decidendi: Where receipt and duty payment on capital goods are established and the Department cannot rebut the factual findings, Modvat credit cannot be denied merely because the duplicate invoice is not available, especially when the show cause notice is not supported by proper verification.

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