Modvat credit cannot be denied for pre-notification purchases merely because the supplier was not yet required to be registered.

Modvat credit on purchases made before Notification No. 32/94-C.E. (N.T.) could not be denied merely because the supplier was a wholesale dealer not yet required to be registered. The registration condition was introduced only on 4-7-1994, so it did not apply to an invoice dated 30-6-1994. A later requirement that the supplier obtain registration by a fixed date could not be enforced against the purchaser, who had no control over the supplier's registration. The record also reflected duty payment through the manufacturer's invoice and PLA debit, supporting entitlement to credit on the purchase.

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Issues: Whether Modvat credit could be denied merely because the goods were purchased from a wholesale dealer who was not required to be registered on the date of the invoice, and whether the later registration requirement introduced by notification could be applied to the petitioner's purchase.

Analysis: The invoice was dated 30-6-1994. The requirement that the selling wholesaler be registered with the department was introduced only by Notification No. 32/94-C.E. (N.T.) dated 4-7-1994. Prior to that notification, a wholesale dealer's registration was not a condition for taking Modvat credit on such purchases. The condition imposed by the appellate authority requiring the supplier to obtain registration by 31-12-1994 could not operate against the petitioner because the petitioner had no control over the supplier's registration. The record also showed duty payment on the goods through the manufacturer's invoice and PLA debit.

Conclusion: The petitioner was entitled to Modvat credit of Rs. 65,035 on the purchase made under the invoice dated 30-6-1994.

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