MODVAT credit disallowance set aside where original duty documents were seized and later produced for fresh verification

MODVAT credit disallowance could not be sustained where the demand was confirmed only because original duty-paying documents were not produced, but the record showed they had been taken by preventive officers and were later returned. Once the appellant produced the originals and connected records, the claim required fresh verification. The adjudication was therefore set aside and the matter remanded for de novo consideration, with directions to examine the documents afresh and grant the appellant a proper opportunity of hearing.

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Issues: Whether the demand confirming disallowance of MODVAT credit was sustainable when the original duty-paying documents had allegedly been seized by the department and were later produced, and whether the matter should be re-examined on those documents.

Analysis: The demand had been confirmed solely because the original documents were not produced. The record showed that the documents had been taken away by the preventive officers and were not within the appellant's control at the relevant time. The appellant later produced the returned originals and connected records, making it necessary to verify the claim afresh. In these circumstances, the original adjudication could not be sustained without re-examination of the documents and a proper hearing.

Conclusion: The impugned order was set aside and the matter was remanded for de novo adjudication after verification of the documents and grant of opportunity of hearing to the appellant.

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