Modvat credit entitlement required verification of dealer registration; matter remanded for fresh adjudication after hearing.

Denial of Modvat credit could not be sustained without verifying whether the invoice-issuing dealer held valid Central Excise registration at its head office, because that fact could materially affect entitlement to credit. As the authorities had not examined the appellant's plea or recorded a finding on that point, the matter was not properly adjudicated on the relevant factual basis. The impugned order was set aside and the case remanded for de novo consideration after affording the appellant a hearing.

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Issues: Whether the denial of Modvat credit could be sustained without verifying the registration status of the invoice-issuing dealer at the relevant head office, and whether the matter required fresh adjudication.

Analysis: The authorities below had not recorded any finding or undertaken verification on the appellant's plea that the dealer issuing the invoices held valid Central Excise registration at the head office. Since this fact could materially affect the entitlement to Modvat credit, the dispute had not been properly examined on the relevant factual basis.

Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority for de novo consideration after giving the appellant an opportunity of hearing.

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