Procedural Modvat credit rule treated as retrospective, allowing credit on original invoice when duplicate invoice is lost.

Sub-rule (2A) of Rule 57G, inserted by Notification No. 23/94, was treated as a clarificatory procedural amendment and applied retrospectively. It provided an alternative method for claiming Modvat credit where the duplicate invoice was lost, while preserving the Assistant Collector's power to verify the claim through affidavit, undertaking, enquiry, or other appropriate means. The provision did not create a new substantive restriction; it only made the existing safeguard explicit. Accordingly, credit could not be denied solely because the duplicate invoice was unavailable if the Assistant Collector was otherwise satisfied.

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Issues: Whether sub-rule (2A) of Rule 57G, inserted by Notification No. 23/94, was clarificatory and procedural in nature so as to apply retrospectively, thereby permitting Modvat credit on the basis of the original invoice where the duplicate invoice had been lost.

Analysis: The provision was treated as procedural because the Modvat scheme was intended to ensure credit only on duty-paid goods and to prevent misuse of the facility. The earlier position already permitted the Assistant Collector to verify and satisfy himself where the gate pass or supporting document was lost, and the insertion of sub-rule (2A) merely made that implicit safeguard explicit. The new sub-rule therefore supplied an alternative procedure, subject to satisfaction of the Assistant Collector, and was regarded as clarificatory rather than as creating a new substantive restriction.

Conclusion: The provision was held to be retrospective in operation, and Modvat credit could not be denied merely because the duplicate invoice was unavailable if the Assistant Collector was otherwise satisfied through affidavit, undertaking, enquiry, or other appropriate verification.

Final Conclusion: The impugned orders were set aside and the assessee was held entitled to credit subject to satisfaction of the Assistant Collector.

Ratio Decidendi: A procedural amendment that merely clarifies the manner of compliance and preserves departmental verification powers is ordinarily retrospective and may be applied to pending transactions.

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