Modvat credit requires the prescribed duty-paying document in force when credit is claimed; original invoice copy was rejected.

Modvat credit was admissible only on the duty-paying document prescribed by the notification in force when credit was claimed, so the original copy of invoice could not be used after Notification No. 2/95-C.E. required the duplicate copy. The earlier issuance of the invoices did not justify reliance on a non-prescribed form, and denial of credit was upheld. Penalty was separately considered on the facts and circumstances and was set aside.

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Issues: Whether Modvat credit could be taken on the strength of the original copy of invoice after Notification No. 2/95-C.E. dated 19-1-95 prescribed the duplicate copy of invoice as the approved duty-paying document, and whether the penalty was sustainable.

Analysis: The Tribunal held that once the notification came into force, credit could be availed only on the document recognised by it. The fact that the invoices were issued earlier did not permit the assessee to rely on a document that was not the prescribed form when credit was claimed. On the same reasoning, the benefit could not be claimed on the original copy of invoice after the notification had taken effect. As regards penalty, the Tribunal considered the facts and circumstances to grant relief.

Conclusion: Modvat credit on the original invoice was not admissible after the notification, and the denial of credit was upheld. The penalty was set aside.

Final Conclusion: The substantive demand-related relief failed, but the assessee obtained relief from penalty.

Ratio Decidendi: Credit under Modvat can be availed only on the document prescribed by the governing notification in force when the credit is claimed, and an earlier issuance of the document does not permit reliance on a non-prescribed form.

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