2003 (9) TMI 463 - AT - Central Excise

Summary

Issues: Denial of Modvat credit due to unregistered dealer

In this case, the issue revolves around the denial of Modvat credit to the appellants based on the ground that the dealer, M/s. Shiva International, who issued the invoices, was not registered with the Revenue Authority.

Analysis:

The appellants contended that M/s. Shiva International, the dealer in question, was a proprietary concern and had been taken over by M/s. Shiva Metal Alloys International before December 1994, which was registered with the Revenue Authority. Therefore, they argued that the denial of Modvat credit on the basis of dealer registration was unjustified.

The Revenue, represented by the JDR, maintained that M/s. Shiva International had never been registered with the Revenue Authority. Consequently, they argued that the invoices issued by an unregistered dealer could not be utilized for claiming Modvat credit.

However, a crucial point emerged during the proceedings. It was revealed that M/s. Shiva Metal Alloys International had taken over M/s. Shiva International in August 1994. The Memorandum of Association of M/s. Shiva Metal Alloys International explicitly stated that the purpose of the takeover was to continue the business conducted under the proprietorship of M/s. Shiva International, along with all its assets and liabilities. Importantly, M/s. Shiva Metal Alloys International was a registered dealer with the Revenue Authority.

Given these circumstances, the Tribunal concluded that since M/s. Shiva Metal Alloys International, the successor of M/s. Shiva International, was a registered dealer, the denial of Modvat credit to the appellants based on the dealer's registration status was unwarranted. Consequently, the impugned order was set aside, and the appeal of the appellants was allowed.