Modvat credit cannot be denied on an uncorroborated statement when contemporaneous records support receipt, repair, and duty-paid clearance.

Modvat credit could not be denied on the basis of an uncorroborated oral statement where contemporaneous records showed receipt of rejected door trims for repair, remaking, and subsequent clearance on payment of duty. The documentary entries directly supported the assessee's version and contradicted the claim that the materials had been destroyed as unusable. The stated principle is that such a statement cannot be preferred over reliable contemporaneous records, and on that basis the credit denial was held unsustainable.

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Issues: Whether Modvat credit could be denied on the basis of an uncorroborated statement when contemporaneous records showed receipt of rejected door trims for repair and remaking.

Analysis: The credit denial rested on a statement that the rejected materials were destroyed as unusable. Against that, the assessee produced contemporaneous account records showing that the rejected goods were received back, repaired or remade, and thereafter cleared on payment of duty. The documentary evidence directly supported the assessee's version and contradicted the oral statement. An uncorroborated statement could not be preferred over such contemporaneous records.

Conclusion: The denial of Modvat credit was unsustainable and the assessee succeeded.

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