1996 (7) TMI 353 - AT - Central Excise

Summary

Issues:
Grant of Modvat credit for goods received directly from manufacturer without physical receipt by dealer.

Analysis:
The appeal before the Appellate Tribunal CEGAT, MADRAS centered around the grant of Modvat credit for goods received by the appellants directly from the manufacturer without physical receipt by the dealer. The lower authority had held that the sale was in transit and the documents provided were not in compliance with Rule 57G.

The appellant's representative argued that the sales invoice of the dealer had been prescribed as a valid document under Rule 57G as per Notification No. 15/94. The notification specified the requirements for the invoice issued by a manufacturer, wholesale distributor/dealer, or importer, including duty particulars and other necessary details.

Furthermore, the appellant contended that despite the goods not physically reaching the dealer's premises, the invoice issued by the dealer met the requirements of Notification No. 15/94. The appellant referred to a clarification by the Board stating that Modvat credit is allowable when goods are directly sent to the assessee without physical movement to the dealer, provided the invoice contains the names of the assessee.

The Department's representative argued that since the goods were not received under the prescribed documents, the appellant's plea should be rejected. However, the Tribunal noted that the dealer invoice was prescribed as a document under Rule 57G at the relevant time and that the appellant had produced the required invoice, albeit with the discrepancy of goods not physically moving to the dealer's premises.

Ultimately, the Tribunal found that there was substantial compliance with the requirements for Modvat credit. The Tribunal considered the confusion surrounding documentation modalities due to changes in clearance procedures and allowed the appellant's plea for Modvat credit, as the documents produced demonstrated a clear connection between the goods received and the duty-paying documents.

Therefore, the appeal was allowed in favor of the appellant, granting them the Modvat credit for the goods received directly from the manufacturer despite the absence of physical receipt by the dealer.