2001 (1) TMI 388 - AT - Central Excise

Summary

Issues:
Denial of Modvat credit on duty paid on soda ash due to the dealer's lack of registration.

Analysis:
The appeal pertains to the denial of Modvat credit to the appellant, a glass manufacturer, for duty paid on soda ash purchased from an unregistered dealer. The appellant argues that they were unaware of the registration requirement for the dealer at the time of purchase. They contend that the Central Excise Authorities could have verified the duty payment on the goods instead of arbitrarily denying the credit. The appellant cites the case of Bengal Safety Industries v. CCE, Calcutta-I, where non-registration by a dealer was not deemed a valid ground for denying credit. Additionally, they highlight that the denial of credit contradicts the Board's instructions, which allowed time for dealer registration until December 1994, and invoices issued until then were considered valid for Modvat purposes.

The appellant also points out that they presented the Tribunal's decision in the Bengal Safety Industries case to the Commissioner, who disregarded the Tribunal's order and issued the impugned order against the appellant. The Commissioner's decision is deemed a violation of judicial discipline, as he is bound by the Tribunal's order. The Commissioner's order is found to be contrary to the principles established in the Tribunal's previous decisions, as explicitly stated in the order.

The Commissioner's order, rejecting the appeal and upholding the denial of Modvat credit, is based on the mandatory requirement of dealer registration. The Commissioner emphasizes that the appellants should have ensured procurement of inputs from a registered source to avail Modvat credit. However, the Tribunal finds the Commissioner's decision to be illegal, as it goes against the binding nature of the Tribunal's orders on subordinate authorities. The Tribunal sets aside the impugned order and provides consequential relief to the appellants, emphasizing the binding nature of Tribunal decisions on all subordinate authorities.