Modvat credit on manufacturer invoices upheld where dealer authorisation or registration was not a stated condition.

Modvat credit could not be denied merely because the invoice was issued by a dealer who had not been specifically appointed or registered by the manufacturer. Notification No. 15/94 accepted invoices issued by a manufacturer, wholesale distributor, or dealer of a manufacturer for goods bought from the manufacturer at the factory or depot, and it did not then impose prior authorisation or registration as a condition. As the goods were purchased directly from the manufacturer and the invoice chain was undisputed, the notification and the definition of wholesale dealer were correctly applied, and credit was allowed.

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Issues: Whether Modvat credit could be denied merely because the invoices were issued by a dealer who had not been specifically appointed or registered by the manufacturer, when the goods were purchased directly from the manufacturer and the notification recognised invoices issued by a wholesale dealer.

Analysis: Notification No. 15/94 dated 30-3-1994 accepted invoices issued by a manufacturer, a wholesale distributor, or a dealer of a manufacturer in respect of goods bought from the manufacturer at the factory or from the manufacturer's depot. The notification did not require prior appointment or authorisation of the dealer by the manufacturer, nor did it then prescribe registration as a condition. Since the goods had been purchased directly from the manufacturer and the invoice chain was otherwise undisputed, the definition of wholesale dealer and the notification were correctly applied to allow credit.

Conclusion: The Modvat credit was rightly allowed and the departmental appeal failed.

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