Modvat credit requires prescribed duty-paying documents; cash memos alone were insufficient and the disallowance was upheld.

Modvat credit was denied where the assessee relied on cash memos issued by Hindustan Petroleum Corporation Limited, because those cash memos were not prescribed duty-paying documents under Rule 57G. The earlier authorities cited by the assessee were distinguished since they involved invoices or challans issued from manufacturers' depots, or invoice-cum-challans recognised as valid documents under Notification No. 32/94. On that basis, the claim for credit failed and the disallowance was sustained.

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Issues: Whether Modvat credit was admissible on the strength of cash memos issued by Hindustan Petroleum Corporation Limited as duty paying documents under Rule 57G.

Analysis: Credit had been taken on cash memos issued by the supplier, but such cash memos were not prescribed duty paying documents for availing Modvat credit. The earlier decisions cited by the appellant were distinguished because they concerned invoices or challans issued from manufacturers' depots or invoice-cum-challans that were valid under Rule 57G in the light of Notification No. 32/94.

Conclusion: The appellant was not entitled to Modvat credit and the disallowance was upheld.

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