Modvat credit documentation: invoices from authorised stockists or dealers may be valid when goods are bought from the manufacturer and resold onward.

Invoices issued by authorised stockists or authorised dealers can qualify as valid documents for Modvat credit where they purchased excisable goods from the manufacturer and supplied them onward in wholesale quantities. Notification No. 16/94-C.E. treated invoices of a wholesale distributor or dealer, for goods bought from the manufacturer's factory or depot, as acceptable for credit. The suppliers' description as stockist or dealer did not disqualify them from that status on these facts, and the invoices were therefore valid documents for availing Modvat credit.

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Issues: Whether invoices issued by authorised stockists or authorised dealers, who had purchased excisable goods from the manufacturer and sold them onward, were valid documents for availing Modvat credit under Notification No. 16/94-C.E. dated 30-03-1994.

Analysis: Notification No. 16/94-C.E. dated 30-03-1994 treated invoices issued by a wholesale distributor or dealer of a manufacturer, where the goods had been purchased from the manufacturer's factory or depot, as acceptable documents for Modvat credit. The suppliers in question were not manufacturers, but they had bought the goods from the manufacturer and supplied them to the appellant. Their description as authorised stockist or authorised dealer did not exclude them from being dealers for the purpose of the notification, particularly when the transactions were in wholesale quantities and the nature of the supply was undisputed.

Conclusion: The invoices were valid documents for Modvat credit and the denial of credit was unsustainable.

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