The problem is that a Certificate of Destruction should only be issued by the scrappy when the vehicle is actually destroyed, what some of them are doing is issuing the certificate 'in advance'.
What should happen is that if a vehicle is taken to be scrapped, and is destroyed there and then, a COD should be issued at that time.
If it is to be destroyed some time later (as apparently happened to the OP's car), the Registered Keeper follows the V5C 'Transferred to the Trade' procedure and the scrappy issues the COD later, when it is actually destroyed.
So in theory, no vehicle should exist (as such) if a COD has been issued for it, but luckily it appears that if it can be shown that the COD has been issued in error, the DVLA will cancel it.
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