Modvat credit on original invoice is admissible when duplicate copy is lost in transit and inputs are duty-paid.

Modvat credit was admissible on the original invoice where the duplicate copy had been lost in transit, provided the Assistant Commissioner was satisfied about the claim under Rule 57G(2)(a) of the Central Excise Rules, 1944. The rule did not require prior permission before the credit was taken. Because the inputs were duty-paid, received in the factory, and used in manufacture, and the assessee had sought regularisation after stating that the duplicate invoices were lost in transit, credit could not be denied solely on that procedural ground.

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Issues: Whether Modvat credit could be denied when inputs were duty-paid and used in manufacture merely because the credit was taken on the original invoice after the duplicate copy was stated to have been lost in transit, and whether prior permission of the Assistant Commissioner was mandatory.

Analysis: The only substantive dispute was the admissibility of credit on the original invoice under Rule 57G(2)(a) of the Central Excise Rules, 1944. The provision permitted credit on the basis of the original invoice where the duplicate copy had been lost in transit, subject to the satisfaction of the Assistant Commissioner. The rule did not prescribe any mandatory requirement of prior permission before availing such credit. On the facts, the assessee had consistently stated that the duplicate invoices were lost in transit and had sought regularisation, while there was no dispute regarding receipt and use of duty-paid inputs in the factory.

Conclusion: Modvat credit could not be denied on this ground, and the Revenue's contention failed.

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