Modvat credit follows duty shown in input documents; excess duty paid by supplier did not justify denial of credit.

Modvat credit on inputs is admissible when the duty paying documents accompanying the inputs show duty paid, even if the supplier may have paid duty at a higher amount than the effective exemption rate. The receiving authority is not to re-assess the supplier's duty for Modvat purposes where the inputs are otherwise duty-paid and properly documented. On these facts, the duty shown in the documents governed entitlement, and the department's objection to credit failed.

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Issues: Whether Modvat credit on inputs was admissible where the supplier's duty paying documents reflected duty paid at a higher amount than the effective duty rate under the exemption notification.

Analysis: The credit claim was examined in the light of the duty paying documents, the supplier's classification and RT-12 returns, and the Modvat scheme under the Central Excise Rules. The governing principle applied was that credit is to be allowed on the duty indicated in the documents accompanying the inputs, and the receiving authority is not to re-assess the duty on the inputs for Modvat purposes. The fact that the supplier may have paid duty above the effective rate did not, on these facts, disqualify the credit.

Conclusion: The Modvat credit was rightly allowed and the department's objection failed.

Final Conclusion: The appeal was rejected because the respondent's entitlement to Modvat credit on the duty reflected in the input documents was upheld.

Ratio Decidendi: For Modvat purposes, credit is governed by the duty shown in the duty paying documents accompanying the inputs, and excess duty paid by the supplier does not by itself justify denial of credit when the inputs are otherwise duty-paid and properly documented.

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