Modvat credit requires a prescribed duty paying document; an internal requisition slip cannot substitute for statutory compliance.

Modvat credit was held inadmissible where the assessee relied on an internal requisition slip issued by its head office instead of a prescribed duty paying document. Although the inputs had suffered duty, the credit mechanism required compliance with the statutory document-based procedure, and an internal distribution slip could not substitute for the recognised evidence of duty payment. Public body status did not relax those requirements. The denial of credit was therefore upheld.

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Issues: Whether Modvat credit could be validly taken on the strength of an internal requisition slip issued by the appellant's head office, instead of a prescribed duty paying document.

Analysis: The inputs had admittedly suffered duty, but the credit was claimed on the basis of an internal document generated for distribution of a consolidated consignment received from the supplier. The prescribed procedure required a recognised duty paying document, and the internal requisition slip could not be substituted for such a document. The fact that the appellant was a public body did not dispense with compliance with the statutory requirements for availing credit.

Conclusion: Modvat credit was not admissible on the internal document, and the denial of credit was upheld.

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