2007 (4) TMI 564 - AT - Central Excise

Summary

Issues:
1. Whether Modvat credit granted by the Ld. Commissioner (Appeal) based on circulars dated 30th March, 1994 and 12th May, 1994 was permissible when the basic condition of registration was not met by the selling dealer.
2. Whether the Circular No. 32/94 dated 4th July, 1994 entitled the assessee to Modvat Credit if the dealer was registered with Central Excise Authority.
3. Whether the denial of Modvat benefit solely on technical grounds of registration date is justified in law.

Analysis:

Issue 1:
The Revenue appealed to set aside the order granting Modvat credit to the Respondent based on invoices issued by registered dealers after the prescribed registration deadline. The Revenue argued that the Modvat credit was impermissible as the selling dealer did not meet the registration requirement. The Ld. SDR emphasized the undisputed registration dates of the dealers and cited a Tribunal decision to support the Revenue's position.

Issue 2:
The Respondent contended that Circular No. 32/94 allowed Modvat Credit if the dealer was registered with the Central Excise Authority. The Respondent relied on various circulars to support their claim, emphasizing that the invoices were issued in accordance with the circulars dated 30th March, 1994 and 12th May, 1994. The Respondent also cited a High Court judgment to argue that denial of Modvat benefit solely on registration date technicalities is unjustified.

Issue 3:
Upon review, the Ld. Commissioner (Appeals) found that the Modvat credit was related to November and December 1994, and the dealers issuing the invoices were registered in January and February 1995. The Ld. Commissioner's decision was supported by a High Court judgment emphasizing that denial of Modvat benefit based solely on registration date technicalities would be a travesty of justice. The Tribunal concurred with this view, noting that denying the benefit without evidence of duty evasion would frustrate the interest of justice.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the Modvat credit granted to the Respondent based on the legal provisions and precedents cited during the proceedings.