2006 (8) TMI 598 - AT - Central Excise

Summary

Issues:
1. Entitlement to avail modvat credit based on documents from an unregistered dealer.
2. Interpretation of legal judgments regarding the validity of invoices from non-registered dealers for modvat credit.

Analysis:
Issue 1: The appeal was filed against an Order-in-Appeal accepting documents produced by the assessee for modvat credit. The Commissioner acknowledged the purchase of furnace oil by the assessee for modvat purposes and allowed the credit based on the documents issued by the supplier, even though the supplier got registered after the relevant period. The Commissioner referred to Circular No. 76/76/94-CX and held that credits should have been allowed for the entire period based on the same set of documents. Various legal precedents were cited to support the validity of invoices from unregistered dealers for modvat credit, emphasizing that the substantial benefit should not be denied due to minor technicalities. The Additional Commissioner's decision to allow credit was deemed legal and proper, leading to the dismissal of the appeal.

Issue 2: The Revenue contended that the assessee was not entitled to modvat credit based on documents from an unregistered dealer, citing a Larger Bench decision in a specific case. However, the Counsel referenced a Gujarat High Court judgment that overruled the Larger Bench decision, supporting the validity of invoices from non-registered dealers for modvat credit. The Tribunal noted the Commissioner's reliance on various judgments to grant modvat credit and highlighted the Gujarat High Court's ruling, which rendered the Revenue's appeal lacking merit and subsequently rejected it.

In conclusion, the Tribunal upheld the Commissioner's decision to allow modvat credit based on documents from an unregistered dealer, emphasizing the importance of substantial benefit and legal precedents supporting such allowances. The appeal by the Revenue was dismissed, and the order passed by the Additional Commissioner was upheld based on the legal interpretations provided by the Tribunal.