Modvat credit dispute turned on duty documents and RG23A entries, requiring a speaking order on the assessee's objections.

Modvat credit could not be denied solely because the inputs were not accompanied by duty paying documents; the decisive question was whether the inputs were in fact covered by the documents produced. The appellate order was deficient because it did not address the assessee's objections on the duty documents, the SAIL challans, or the corresponding accounting entries in RG23A Part I. A proper speaking order was required to examine those discrepancies on merits, and the matter was remanded for fresh decision after affording further hearing.

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Issues: Whether denial of Modvat credit could be sustained when the appellate order did not address the assessee's objections regarding the duty paying documents and the accounting of inputs in RG23A Part I register.

Analysis: The claim for Modvat credit could not be rejected merely because the inputs were not accompanied by duty paying documents. The relevant test was whether the inputs were in fact covered by the documents produced by the assessee. The appellate order did not deal with the assessee's grounds or the discrepancies pointed out in the record, including the description of goods in the SAIL challans and the corresponding RG23A entries. As the matter required examination of those objections on merits, a proper speaking order was necessary.

Conclusion: The impugned order was set aside and the matter was remanded for fresh decision on merits after granting the assessee a further hearing.

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