Modvat credit on furnace oil was limited to actual duty paid where invoices overstated the supplier's duty amount.

Modvat credit on furnace oil depended on proof of actual duty payment on the inputs. Where the invoices reflected an inflated duty amount because the supplier had miscalculated duty, the Department could restrict credit to the correct duty actually payable. On these facts, the assessee had no basis to claim any additional credit beyond the amount recalculated and allowed by the Department.

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Issues: Whether Modvat credit on furnace oil could be denied or restricted when the invoices did not show the correct amount of duty and the Department allowed credit only for the correct duty amount.

Analysis: Eligibility for Modvat credit depended on furnishing proof of duty payment on the inputs. The invoices produced by the assessee were found to reflect an inflated duty amount because of a wrong calculation by the supplier. The Department therefore recalculated the duty and allowed credit only to the extent of the actual correct duty payable. On these facts, there was no basis for any further grievance by the assessee.

Conclusion: The assessee was not entitled to any additional Modvat credit beyond the correct duty amount allowed by the Department.

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