Modvat credit on invoices from unregistered dealers was allowed where duty-paid goods and prescribed particulars were otherwise satisfied.

Modvat credit could not be denied merely because the invoices were issued by an unregistered dealer where the goods were duty-paid, the prescribed invoice particulars were met, and the inputs were received, accounted for, and used in manufacture. The Tribunal treated dealer registration as not a mandatory precondition for the relevant period and applied the earlier view that invoices from unregistered dealers could serve as acceptable credit documents. On that basis, the credit was admissible and the denial of credit, recovery demand, and consequential penalty were unsustainable.

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Issues: Whether Modvat credit could be denied solely because the invoices were issued by an unregistered dealer when the goods had suffered duty and the prescribed invoice particulars were otherwise satisfied.

Analysis: The credit dispute turned on whether dealer registration was a mandatory precondition during the material period. The invoices contained the particulars required by Notification No. 15/94-CE (N.T.) dated 30.03.1994, and Notification No. 64/94-C.E. (N.T.) dated 7-11-1994 was applicable. The reasoning accepted that receipt, accounting, duty-paid nature of the goods, and utilisation in manufacture were the material requirements for availment of credit, and that denial on the purely technical ground of absence of dealer registration was not justified. The earlier Tribunal view treating invoices from unregistered dealers as acceptable documents for credit was applied.

Conclusion: The credit was admissible and the denial of credit, recovery demand, and consequential penalty were unsustainable.

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