2007 (10) TMI 183 - AT - Central Excise

Credit denied for three reasons held that credit can t be denied for reason that it is taken on invoices issued by dealers who are not registered as per Not. 32/94 because requirement of registration was introduced only on 4th July, 1994 Allegation of missing particular is also wrong so credit allowed in that concern in respect of invoice Nos. 41 and 42, description of the goods varied so credit is not allowed in this concern appeal partly allowed

Summary

Issues:
1. Disallowance of Modvat credit on invoices issued by unregistered dealers.
2. Disallowance of credit for invoices not containing requisite particulars.
3. Disallowance of credit for variation in description of goods in certain invoices.

Analysis:
1. The appellants, engaged in manufacturing medicaments falling under Chapter 30 of the Central Excise Tariff Act, had Modvat credit disallowed amounting to Rs. 4,37,958.76. The disallowance was based on the ground that credit was taken on invoices from unregistered dealers, not meeting the requirements of Notification 32/94 dated 4-7-1994. It was also alleged that some invoices had varying descriptions of goods and that credit was taken in excess for certain inputs received during July to September 1994.

2. The Vice-President noted that credit on invoices issued before 4th July 1994 could not be denied due to dealer non-registration since the registration requirement was introduced only on that date. Moreover, credit taken on invoices from July and August 1994 could not be denied as the deadline for dealer registration was extended until 31st December 1994. The Vice-President examined the invoices and found no missing particulars. However, credit for invoice Nos. 41 and 42 was deemed inadmissible due to discrepancies in the description of goods between the trader's invoice and the original invoice.

3. The judgment stated that the issue of variation in credit amount needed re-examination by the adjudicating authority. The matter was remanded for fresh consideration in line with the law, with the assessees given a reasonable opportunity to present their defense. Ultimately, the Vice-President held that credit could not be denied based on dealer non-registration or missing particulars in the invoices as per Notification 15/94. The disallowance of credit for invoice Nos. 41 and 42 was upheld, and the variation in credit amount issue was referred back to the adjudicating authority for further review. The appeal was partly allowed based on the above findings.