Modvat credit restriction on heavy normal paraffin was inapplicable, and the last buyer in a high seas sale qualified as importer.

Modvat credit could not be restricted under Notification No. 5/94-C.E. (N.T.) where the goods were heavy normal paraffin, because the notification applied only to paraffin wax and the two were treated as distinct. The 10% credit cap therefore did not extend to the assessee's product. The alternative objection based on high seas sale also failed, because the last buyer who files the bill of entry and completes customs formalities is treated as the importer for credit purposes. On that basis, the credit restriction was held inapplicable and full relief was available.

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Issues: Whether Modvat credit on heavy normal paraffin could be restricted under Notification No. 5/94-C.E. (N.T.) as if the goods were paraffin wax, and whether the buyer on high seas sale basis could be denied full credit on the ground that it was not the direct importer.

Analysis: The notification restricted credit only in respect of paraffin wax. The goods in question were heavy normal paraffin, which was treated as distinct from paraffin wax on the basis of the Tribunal's classification reasoning. Since the restrictive notification applied only to the specified product, the 10% credit cap could not be extended to heavy normal paraffin. The additional objection based on high seas sale was also rejected because the last buyer who files the bill of entry and completes customs formalities is treated as the importer, and the cited public notice supported that position. Once the main restriction was held inapplicable, the alternative objection did not survive.

Conclusion: The restriction of Modvat credit was not justified, and the assessee was entitled to full relief.

Ratio Decidendi: A restrictive credit notification cannot be applied to goods not covered by its specified description, and the last buyer in a high seas sale who completes import formalities is to be treated as the importer for the relevant credit claim.

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