Mandatory dealer registration governs Modvat credit where invoices were issued after the registration requirement came into force.

Dealer registration was treated as mandatory for invoices supporting Modvat credit once the requirement came into force on 4-7-1994. Because the invoices were issued after that date and the dealer never applied for registration at any stage, the credit claim was not sustainable. The earlier Gujarat High Court ruling allowing credit was distinguished on the basis that, in that case, there had been an attempt to obtain registration, whereas no such attempt existed here. The plea that non-registration resulted from ignorance of law was rejected, and Modvat credit was denied.

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Issues: Whether Modvat credit could be denied where the dealer issuing invoices was not registered under the Central Excise Rules at the relevant time.

Analysis: The registration requirement for dealers issuing invoices for Modvat credit had come into force from 4-7-1994. The invoices in question were issued on 18-7-1994 and 19-7-1994, yet the dealer never applied for registration at any stage and had closed business on 3-9-1994. The earlier Gujarat High Court decision allowing credit was found inapplicable because, unlike that case, there was no attempt at registration here. The plea that the dealer's failure was due to ignorance of law was rejected.

Conclusion: Modvat credit was rightly denied, and the requirement of dealer registration was treated as mandatory in the facts of the case.

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