Modvat credit cannot be denied when assessed returns remain with the department and entitlement is otherwise established.

Modvat credit of excess duty could not be denied merely because assessed RT-12 return copies remained with the department, where the assessee had repeatedly informed the authorities of the excess payment and its inability to take credit without the returned copies. The department failed to act on those requests and produced no material showing that the credit was otherwise inadmissible. On that basis, the demand for reversal of credit was unsustainable, and the credit entitlement was upheld.

---

---

Issues: Whether the appellants were entitled to take Modvat credit of the excess duty paid when the assessed RT-12 returns were not returned by the department and the demand for reversal of credit was sustainable.

Analysis: The appellants had repeatedly informed the department about the excess duty paid and their inability to take credit because the assessed RT-12 copies were not returned. The record showed that the department failed to act on the appellants' requests and did not produce any material to show that the credit was not otherwise admissible. In these circumstances, the demand based on absence of documents could not be sustained when the non-availability of the assessed copies was attributable to the department itself.

Conclusion: The appellants were entitled to the credit, and the demand and the orders passed below were set aside.

Ratio Decidendi: Credit of excess duty cannot be denied or demanded back merely because assessed return copies remain with the department, where the assessee has established entitlement and the department fails to show otherwise.

---