Modvat credit cannot be denied for lost duplicate invoice when receipt of inputs is otherwise supported by evidence.

Modvat credit could not be denied merely because the duplicate invoice was lost in transit where the rules permitted credit on the original invoice, subject to proof that the inputs were received and duty was paid. An affidavit on loss of the duplicate copy and a transporter's certificate were produced, and the insistence on GRs and toll-tax receipts was found unreasonable where they could not be linked to a specific consignment. The prior rejection also lacked cogent reasons for discarding the evidence. The denial was set aside and the matter remanded for fresh decision after recording reasons and granting a reasonable hearing.

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Issues: Whether Modvat credit could be denied merely because the duplicate copy of the invoice was lost in transit and the assessee relied on the original invoice, driver's affidavit and transporter's certificate to establish receipt of inputs.

Analysis: The Rules permitted availment of credit on the original invoice where the duplicate copy had been lost in transit, subject to the satisfaction of the Assistant Commissioner that the inputs had been received and duty had been paid. The assessee produced an affidavit regarding loss of the duplicate copy and a certificate from the transporter. The insistence on production of GRs and toll-tax receipts, despite the assessee's explanation that such documents could not be co-related to a particular consignment, was held to be unreasonable. The lower authority also failed to give cogent reasons for rejecting the evidence produced by the assessee.

Conclusion: The denial of Modvat credit could not be sustained on the existing orders, and the matter was remanded to the original authority for fresh decision after recording reasons and granting a reasonable opportunity of hearing.

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