Modvat credit on original invoice allowed when duplicate copy is lost in transit and statutory conditions are met.

Modvat credit on an original invoice may be taken where the duplicate copy is lost in transit, provided the authority is satisfied that the inputs were received in the factory and duty was paid. The text notes that the assessee had produced supporting material, including a transporter's affidavit, and that receipt and consumption of the inputs were undisputed. It also states that insisting on prior permission before availment, where the application and credit claim were made on the same day, was contrary to the rule's purpose. On that basis, the denial of credit was set aside and entitlement to Modvat credit was upheld.

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Issues: Whether Modvat credit could be taken on the original invoice when the duplicate copy was lost in transit and the assessee had applied for permission on the same day.

Analysis: Rule 57G(6) permits credit on the basis of the original invoice where the duplicate copy is lost in transit, subject to the Assistant Commissioner being satisfied that the inputs were received in the factory and duty was paid. The essential facts were undisputed: the inputs had been received and consumed, duty had been discharged, and supporting documents including the transporter's affidavit were produced. In these circumstances, the insistence on prior permission and rejection of the claim merely because the application and availment were made on the same day was held to be contrary to the spirit of the rule. The reasoning also drew support from the Larger Bench view that the manufacturer should not be put to hardship where the duplicate copy is lost and the matter is awaiting sanction.

Conclusion: The credit could not be denied on the ground that prior permission had not been obtained before availing credit on the original invoice.

Final Conclusion: The assessee's entitlement to Modvat credit was upheld and the denial of credit was set aside.

Ratio Decidendi: Where the statutory conditions for credit on the original invoice are satisfied and the duplicate copy is lost in transit, the credit cannot be refused merely because the assessee sought permission contemporaneously or prior sanction had not been obtained in advance.

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