Modvat credit denied where goods were not received by the dealer and transit-sale circular conditions were not satisfied.

Modvat credit was denied because the goods never reached the registered dealers' premises and the invoices were issued before lawful receipt by the dealer. The Board's circular prohibited Modvatable invoices until actual receipt of goods, and the transit-sale circular did not apply because the goods were sent to a job worker for conversion, not directly to the appellant on the instructions of a registered person. The invoices also lacked the required particulars linking the dispatch to the appellant or the registered dealer. Accordingly, the credit claim failed.

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Issues: Whether Modvat credit was admissible on invoices issued by registered dealers when the goods were not received in the dealers' premises and were sent directly from the manufacturer to a job worker, and whether the transit sale instructions in the Board's circular protected the credit claim.

Analysis: Credit had been taken on the strength of invoices issued under Rule 57GG of the Central Excise Rules, 1944, although the molasses never reached the registered dealers' premises. The binding circular relied upon by the department prohibited issuance of Modvatable invoices until the goods were actually received by the registered dealer. The alternative circular concerning transit sale applied only where goods were dispatched directly to the consumer on the instructions of a registered person, with the manufacturer's invoice containing the required consignee and registered-person particulars. Here, the goods were sent to a job worker for conversion into industrial alcohol, not directly to the appellant, and the invoices did not contain the requisite particulars linking the dispatch to the appellant or to the registered dealer.

Conclusion: Modvat credit was not admissible, and the appellant's claim failed.

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