Modvat credit claims require scrutiny of supporting documents before rejection, and the matter was remanded for fresh examination.

Modvat credit on inputs embedded in final products lying in stock could not be rejected without first examining the supporting documents said to have been filed by the assessee. A rigid insistence that the assessee alone must prove the claim, without calling for or scrutinising the available records, was considered unsustainable because entitlement depended on document review. The lower orders were therefore set aside and the matter was remanded for de novo examination of the documents and fresh determination of the credit claim.

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Issues: Whether the assessee's claim for Modvat credit on inputs contained in final products lying in stock could be denied without examination of the supporting documents and whether the matter should be sent back for fresh consideration.

Analysis: The claim turned on examination of the documents said to have been furnished by the assessee. The refusal to consider the documents and the insistence that the assessee alone must produce proof, without calling for or examining the available records, was found to be unduly rigid. As the claim could be accepted only after scrutiny of the documents, the lower orders were not sustained.

Conclusion: The appeal was allowed, the lower orders were set aside, and the matter was remanded to the Assistant Collector for de novo examination of the documents and fresh determination of the claim.

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