Modvat credit on customer copy invoices from a stockyard was not denied, subject to verification of invoice source.

Modvat credit was claimed on the customer copy of invoices issued by SAIL's stockyard, and the dispute centred on whether the absence of the duplicate copy justified denial of credit. The text states that Rule 57G read with Rule 52A applied to invoices issued by a factory or bonded store room in the normal course, while the invoices here were asserted to have come from a stockyard, not a factory, and the customer copy had been accepted as a duty-paying document. The later notified procedure was also said to support that position. Denial of credit was therefore not upheld on the present facts, and the matter was remanded for limited verification of the source and nature of the invoices.

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Issues: Whether Modvat credit could be taken on the original/customer copy of invoices issued by the stockyard of SAIL, and whether the denial of credit on the ground of non-production of the duplicate copy was sustainable.

Analysis: The credit requirement under Rule 57G read with Rule 52A applies where invoices are issued by a factory in the normal course of clearance from manufacture or bonded store room. On the facts asserted from the outset, the invoices in question were stated to have been issued by the stockyard of SAIL, which was not a factory, and the practice had been to take credit on the customer's copy accepted as a valid duty-paying document. The position was also consistent with the later notification relied upon, and the only matter requiring verification was whether the invoices were in fact issued by the stockyard in terms of the notified procedure.

Conclusion: The denial of Modvat credit was not upheld on the present facts, and the matter was remanded for limited verification of the source and nature of the invoices.

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