Modvat credit on job-work goods is proper when only differential duty is taken and no extra credit is shown.

Modvat credit on inputs sent for job work is not treated as wrongly availed twice where the record shows the goods were received back in processed form and the documents substantiate the job work chain. The factual findings noted that the assessee took credit only to the extent of differential duty on return of the manufactured main frame, with no extra or irregular credit claimed. A separate objection based on documentary compliance under Rule 57G(2) was not borne out by the findings under challenge. On those facts, a demand alleging double Modvat credit is unsustainable and the credit remains proper.

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Issues: Whether Modvat credit was wrongly availed twice in respect of inputs sent for job work and received back after processing, and whether the credit could be denied for alleged non-compliance with the documentary requirements.

Analysis: The Commissioner (Appeals) had recorded a factual finding that the inputs sent under job work procedure were received back in totality as the manufactured main frame, and that the documents on record, including purchase orders, drawings, clearance particulars, and invoice particulars, substantiated the job work operation. It was further found that the credit taken at the return stage was only to the extent of the differential duty and did not amount to any extra or irregular availment of Modvat credit. The appeal before the Tribunal did not successfully challenge these findings on record, and the new objection regarding the validity of documents under Rule 57G(2) did not arise from the findings under appeal.

Conclusion: The alleged double availment of Modvat credit was not established, and the assessee's credit was held to be proper.

Final Conclusion: The Revenue's challenge failed, and the order allowing the assessee's appeal was sustained.

Ratio Decidendi: Where credit is taken only to the extent of differential duty on goods received back after job work, and the factual record shows no extra or irregular availment of credit, a demand alleging double Modvat credit is unsustainable.

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