2005 (11) TMI 390 - AT - Central Excise

Summary

Issues:
1. Availment of Modvat credit on modvatable invoices issued by a registered dealer without premises.
2. Allegation of invalid documents for availing Modvat credit.
3. Confirmation of demand and penalty imposition by Adjudicating Authority and Commissioner (Appeals).
4. Interpretation of Circular No. 96/7/95 regarding the necessity of a godown or office premises for issuing modvatable invoices.

Analysis:
The judgment by the Appellate Tribunal CESTAT, KOLKATA addressed the issue of the appellant availing Modvat credit on modvatable invoices from a registered dealer without premises. The Department alleged that such invoices were invalid for claiming credit as the dealer lacked a godown or office for dealing in excisable goods. The Adjudicating Authority confirmed the demand and imposed penalties, a decision upheld by the Commissioner (Appeals).

The ld. S.D.R. argued that the appellant's credit availment was incorrect since the registered dealer issued invoices without the necessary premises, citing Circular No. 96/7/95. However, the Tribunal noted that the show cause notice did not mention non-receipt or consumption of inputs by the appellant, and the registered dealer was not asked to provide documents related to dispatches of modvatable invoices.

Upon review, the Tribunal found that the Adjudicating Authority's conclusion was based on Rule 57GG, stating the dealer failed to provide evidence of goods dispatch from their godown. The Tribunal emphasized the lack of notice to the dealer to produce such documents, highlighting that the dealer's registration should have been canceled if premises were lacking. Since no cancellation was evident, the Tribunal ruled that faulting the appellant for using the dealer's invoices was unjustified.

Consequently, the Tribunal set aside the order-in-appeal, providing relief to the appellant due to the absence of evidence supporting the denial of Modvat credit. This decision underscores the importance of proper procedures and evidence in challenging credit availment based on dealer invoices without the necessary premises.