2005 (1) TMI 561 - AT - Central Excise

Summary

Issues: Availability of Modvat Credit on duty paid inputs purchased from unregistered dealers.

In this case, the main issue pertains to the availability of Modvat Credit on duty paid inputs purchased from dealers not registered with the Central Excise Department. The appellant, a manufacturer of Cold Rolled Steel Strips and Steel Tubes, availed Modvat Credit on inputs purchased from Steel Authority of India Ltd. (SAIL) and Atma Steel Ltd. during a specific period. The Revenue disallowed the Modvat Credit and imposed a penalty on the appellant, arguing that the dealers were not registered with the Central Excise Department. The appellant's advocate contended that the dealers had indeed registered themselves under Rule 174 of the Central Excise Rules, but the specific registration details were not available. The advocate requested a remand to verify the registration status of the dealers.

The respondent, on the other hand, argued that the dealers issuing Modvatable invoices should be registered with the Central Excise Department as per relevant notifications and circulars. It was highlighted that the appellant failed to prove the registration of the dealers before the specified deadline. The notification and circular emphasized the requirement for dealer registration by a certain date for availing Modvat Credit. As the appellant did not provide evidence of dealer registration by the deadline, the Modvat Credit was deemed unavailable to them.

Upon considering the arguments from both sides, the Tribunal analyzed the legal provisions related to availing Modvat Credit on duty paid inputs. It was noted that the dealers from whom the appellant purchased inputs were not registered with the Central Excise Department when the Modvat Credit was claimed. Amendments to the Central Excise Rules and relevant notifications emphasized the necessity of dealer registration for availing Modvat Credit. The Tribunal found that the appellant did not present any evidence demonstrating that the dealers had registered themselves before the specified deadline. As a result, the appellant was deemed ineligible to avail of the Modvat Credit. The Tribunal concluded that there was no need for further remand as the appellant had sufficient opportunities to substantiate their case. Consequently, the appeal filed by the appellant was rejected.