2006 (11) TMI 134 - HC - Central Excise

Whether a manufacturer can avail credit on inputs on the strength of invoices issued by a dealer from the premises other than for which central excise registration has been granted under rule 174 read with Rule 52AA of Central Excise Rules, 1944 Circular 441/7/99 & Not.7/99makes clear that if the goods were received and payment of duty and use thereof was verifiable, credit could not be denied merely on the ground that the documents did not contain all the particulars credit allowed

Summary

Issues:
Whether a manufacturer can avail credit on inputs based on invoices issued by a dealer from premises other than the registered one under Central Excise Rules, 1944?

Analysis:
The appeal in this case was filed by the revenue challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal. The issue at hand was whether a manufacturer could claim Modvat credit based on invoices issued by a dealer from premises other than the registered one. The assessee had claimed Modvat credit for a specific period, which was disputed by the department. The department argued that since the registered dealer had ceased operations from the registered premises, the claim was invalid. The adjudicating authority upheld this decision, which was further affirmed by the appellate authority.

The Tribunal, however, ruled in favor of the assessee, stating that the payment of duty, receipt, and use of inputs in the final product were proven. The Tribunal also referred to a clarification from the Board, stating that credit could not be denied if the payment of duty and use of inputs were established. The revenue contended that the invoices should have been issued from the registered premises as per statutory requirements. However, the High Court noted that the Board's circular and Notification No.7/99-CE allowed credit if the goods were received, duty payment was verified, and use of inputs was confirmed, regardless of the particulars on the documents.

Ultimately, the High Court found no substantial question of law in the matter and dismissed the appeal. This judgment clarifies that under the Central Excise Rules, 1944, a manufacturer can avail credit on inputs even if the invoices are issued by a dealer from premises other than the registered one, as long as the necessary verifications regarding duty payment and use of inputs are in place.