Modvat credit on original invoice allowed when duplicate copy was lost in transit and compliance defects were regularised.

Modvat credit could not be denied solely because the duplicate invoice was not produced where the assessee claimed it was lost in transit and sought credit on the original invoice. Credit under the invoice-based scheme was permissible on the original invoice, subject to the Assistant Commissioner's satisfaction, and a Board circular confirmed that position after the amendment. The assessee had filed an affidavit and asked to regularise the claim, but the department rejected the credit without seeking further curing evidence or guiding compliance. On these facts, the technical objection was held insufficient, and credit on the original invoice was allowed.

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Issues: Whether Modvat credit could be denied merely because the duplicate copy of the invoice was not produced, when the assessee claimed that the duplicate copy had been lost in transit and had sought permission to take credit on the original invoice.

Analysis: Credit under the invoice-based Modvat scheme was permitted on the strength of the original invoice where the duplicate copy was lost, subject to the satisfaction of the Assistant Commissioner. The Board circular issued after the amendment clarified that credit on the original invoice could be taken on such satisfaction. The assessee had placed an affidavit and sought permission for credit, but the department disallowed the credit without calling for the transporter's affidavit or otherwise guiding the assessee to cure the defect. In similar circumstances, credit had already been allowed in earlier tribunal decisions where the department could not deny credit on a purely technical objection after the assessee had sought to regularise the claim.

Conclusion: Denial of Modvat credit on this ground was not justified, and the assessee was entitled to the credit on the original invoice.

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