Modvat credit on endorsed bill of entry to registered depot cannot be denied on grounds beyond a limited remand

Modvat credit was treated as admissible where the bill of entry was endorsed to the assessee's registered depot and the remand conditions were satisfied. The earlier remand confined the enquiry to whether the Ghaziabad premises was a depot and whether the documents and registers complied with Rule 174 of the Central Excise Rules, so the adjudicating authority could not introduce a new requirement that the assessee be registered as a dealer. The denial of credit on that fresh ground was therefore unsustainable, and the duty demand and penalty confirmed below were set aside.

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Issues: Whether Modvat credit was admissible on a bill of entry endorsed to the assessee's registered depot, and whether the authorities below could deny the credit by going beyond the scope of the earlier remand order.

Analysis: The remand order had limited the enquiry to whether the Ghaziabad premises was a depot and whether the documents and registers satisfied the requirements under Rule 174 of the Central Excise Rules. In the remand proceedings, the adjudicating authority introduced a new ground that the assessee ought to have been registered as a dealer for passing on Modvat credit, and the appellate authority also proceeded on the footing that endorsement from head office to depot was impermissible. Since the premises shown in the bill of entry was the assessee's registered depot and the earlier remand had already treated such depot as eligible to issue Modvatable invoices, the denial of credit on a fresh and extraneous ground was not justified.

Conclusion: Modvat credit was admissible to the assessee and the impugned denial of credit could not be sustained.

Final Conclusion: The appeal succeeded and the assessee obtained relief against the duty demand and penalty confirmed below.

Ratio Decidendi: Where a remand order confines the enquiry to specified issues, the adjudicating authority cannot deny credit on a new ground beyond that remand, and credit cannot be refused when the document pertains to the assessee's registered depot and the remand conditions are satisfied.

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