Deemed credit under Notification No. 58/97 cannot be denied for lack of extra proof when prescribed invoices and challans exist.

Deemed credit under Notification No. 58/97 could not be denied merely because the buyer did not produce independent proof that the supplier, operating under the compounded levy scheme, had discharged duty. The notification required receipt of inputs under a proper invoice declaring payment of excise duty under Section 3A, and the assessee had invoices showing that declaration together with the supplier's TR-6 challans. On those facts, the prescribed conditions were satisfied and no additional evidentiary burden could be imposed beyond the documents specified in the notification. The denial of Modvat/deemed credit was therefore unsustainable, and credit was admissible.

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Issues: Whether deemed credit under Notification No. 58/97 dated 30-8-97 could be denied merely because the assessee did not produce independent proof that the supplier, working under the compounded levy scheme, had actually discharged the duty liability.

Analysis: The inputs were received directly from the manufacturer, the invoices carried the endorsement that duty had been paid under the compounded levy scheme under Rule 96ZP, and the assessee produced the manufacturer's TR-6 challans showing discharge of duty. The notification required receipt of inputs under a proper invoice declaring payment of excise duty under Section 3A, and did not require the buyer to lead separate evidence beyond the prescribed documents. The facts satisfied the conditions of the notification, and the cited precedent supported the view that Modvat benefit could not be denied for want of additional proof of duty payment by the supplier.

Conclusion: The denial of deemed credit was unsustainable and the assessee was entitled to the credit.

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