Modvat credit on consignment agent invoices upheld as valid where the agent is a registered dealer.

Invoices issued by a consignment agent registered as a dealer under the Central Excise Rules, 1944 were treated as valid documents for Modvat credit. The Tribunal noted that the goods were received under invoices issued by a first stage dealer registered with the revenue authorities, and relied on the clarification that invoices issued by consignment agents registered under Rule 174 are acceptable for credit purposes. It also noted that Rule 57G(3)(b) recognises invoices issued by the manufacturer from a depot or from the premises of a consignment agent as valid documents. Denial of Modvat credit on the ground that the invoices were not issued directly by the manufacturer was therefore unsustainable.

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Issues: Whether invoices issued by a consignment agent registered as a dealer under the Central Excise Rules, 1944 could be treated as valid documents for availing Modvat credit.

Analysis: The credit was denied on the ground that the invoices were issued by the consignment agent and not directly by the manufacturer. The Tribunal noted that the appellants had received goods under invoices issued by a first stage dealer registered with the revenue authorities, and that the relevant clarification issued by the Chief Commissioner stated that invoices issued by consignment agents registered under Rule 174 of the Central Excise Rules, 1944 are valid documents for availing Modvat credit. The clarification further indicated that Rule 57G(3)(b) recognizes invoices issued by the manufacturer from his depot or from the premises of the consignment agent as valid documents for credit.

Conclusion: Invoices issued by a consignment agent who is registered as a dealer are valid documents for availing Modvat credit, and the denial of credit was unsustainable. The appeals were allowed.

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