2005 (1) TMI 428 - AT - Central Excise

Summary

Issues:
1. Stay of recovery of Rs. 5,32,623.20 and penalty of Rs. 51,000 sought by appellants.
2. Validity of Modvat credit based on invoices issued by unregistered dealers.
3. Denial of credit for input received from Atma Steel Limited due to missing details in the invoice.
4. Discrepancy in premises mentioned in registration certificate and invoices issued by Atma Steel Limited.

Analysis:
1. The appellants sought a stay of recovery of Rs. 5,32,623.20 and penalty of Rs. 51,000. The demand was raised due to the appellants taking Modvat credit based on invoices from dealers who were not registered. The period in question was July to December 1994. The advocate for the appellants argued that the dealers obtained registration before December 1994, making the invoices valid for credit. Additionally, for inputs from Atma Steel Limited, the department denied credit citing missing details in the invoice, which the advocate argued were present in Annexure-1. The lower authorities upheld the demand despite the clarification provided.

2. The JDR representing the respondent argued that the registration certificate of Atma Steel Limited pertained to different premises than those mentioned in the invoices, rendering the invoices invalid.

3. The tribunal considered both arguments. It noted that when the notification for dealer registration was issued in July 1994, the appellants were issuing invoices without registration but with necessary duty particulars. CBEC later clarified that if dealers registered before December 31, 1994, and all required invoice particulars were present in invoices issued before registration, those invoices would be considered valid. The main objection raised by the department was the discrepancy in premises between the registration certificate and the invoices from Atma Steel Limited. The advocate clarified that the difference arose because the appellants were in the process of relocating when they obtained the registration certificate. The Commissioner (Appeals) emphasized that goods should be cleared from the registered premises for credit eligibility, a stance the tribunal found insufficient to deny credit. The tribunal directed the appellants to pre-deposit Rs. 52,000, with a stay on the recovery of the balance amount upon compliance within two months.

This detailed analysis covers the issues raised in the judgment, providing a comprehensive overview of the arguments presented and the tribunal's decision.