1997 (6) TMI 236 - AT - Central Excise

Summary

Issues:
1. Admissibility of Modvat credit for invoices issued by wholesale dealers.
2. Non-production of invoices at the time of availing Modvat credit.

Analysis:

Issue 1: Admissibility of Modvat credit for invoices issued by wholesale dealers
The appeal involved the denial of Modvat credit by the Commissioner of Central Excise to M/s. Bhushan Steel and Strips based on invoices issued by wholesale dealers. The Assistant Collector disallowed credit on invoices from wholesale dealers, stating they were not duly appointed wholesale dealers of the manufacturers. The Tribunal examined Notification No. 15/94, which prescribed invoices issued by wholesale distributors/dealers of manufacturers for claiming Modvat credit. The Tribunal referred to a previous case where invoices issued by unregistered dealers were allowed for Modvat credit, emphasizing that procedural requirements should not hinder substantive benefits. The Tribunal concluded that the denial of credit based on the lack of formal appointment or registration of wholesale dealers by the manufacturer was incorrect. Therefore, the appellants' claim for Modvat credit on invoices issued by wholesale dealers was upheld.

Issue 2: Non-production of invoices at the time of availing Modvat credit
Regarding four invoices from SAIL not produced during the initial adjudication but later submitted during the appeal, the Tribunal remanded the matter to the Assistant Commissioner for verification. The Tribunal held that rejection of these invoices based on late production was improper, as procedural irregularities could be condoned if substantial compliance with the rules was demonstrated. The Tribunal emphasized the importance of natural justice principles in re-evaluating the eligibility of the four invoices. The appeal was disposed of with instructions for re-examination of the four invoices by the Assistant Collector while ensuring adherence to natural justice principles.

In conclusion, the Tribunal's judgment addressed the issues of admissibility of Modvat credit for invoices from wholesale dealers and the late production of invoices, providing clarity on the interpretation of relevant notifications and the treatment of procedural irregularities in claiming Modvat credit.