Modvat credit on duty-paid supplier documents upheld where excess duty payment by supplier did not defeat recipient credit.

Modvat credit was treated as admissible where the recipient unit took credit on the basis of duty-paid supplier documents, and the record showed no receipt of goods without such documents or credit beyond the duty reflected in them. The Tribunal's view was accepted that the recipient's credit could not be disturbed without first upsetting the supplier's assessment, especially when the supplier had paid duty in excess of the prescribed rate. No infirmity was found in the Tribunal's approach, and no substantial question of law arose.

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Issues: Whether Modvat credit was admissible to the recipient unit on duty reflected in the supplier's documents, even though the supplier had paid duty in excess of the prescribed rate, and whether the Tribunal erred in allowing such credit.

Analysis: The goods were received with duty-paid documents, and the assessee availed credit on that basis. There was no dispute that the supplier had paid duty in excess of the prescribed rate, nor was it the department's case that the assessee had received goods without duty-paid documents or had taken credit beyond the duty actually reflected in those documents. The Tribunal's view that the assessee's assessment could not be disturbed without first disturbing the supplier's assessment was accepted, and no infirmity was found in the Tribunal's order. No substantial question of law arose.

Conclusion: The credit was held admissible and the assessee's position was upheld.

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