Modvat credit cannot be denied for pre-July 1994 invoices merely because the dealer lacked formal manufacturer appointment.

Modvat credit could not be denied merely because the invoice was issued by a dealer who had not been specifically appointed by the manufacturer as an authorised dealer or distributor, where the transaction otherwise satisfied the applicable notification requirements. The Tribunal treated the matter as governed by the pre-July 1994 regime and held that the later invoice requirements under Rule 57G for registered dealers did not apply to May and June 1994. On that basis, the departmental objection failed and the credit remained available to the assessee.

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Issues: Whether Modvat credit could be denied merely because the invoices were issued by dealers who were not specifically appointed by the manufacturer as authorised dealers or distributors, and whether the disputed transactions, relating to May and June 1994, were governed by the later invoice requirements under Rule 57G.

Analysis: The dispute turned on the meaning of the expression relating to wholesale dealers or distributors under Notification No. 15/94-C.E. (N.T.) dated 30-03-1994, read with Section 2(k) of the Central Excises and Salt Act, 1944. The Tribunal found the case to be on all fours with an earlier decision holding that a dealer who purchases goods from the manufacturer and resells them is not required, for the relevant period, to be specifically appointed by the manufacturer as an authorised dealer. The period in question was before the July 1994 prescription of invoice requirements for registered dealers under Rule 57G of the Central Excise Rules, 1944.

Conclusion: The credit could not be denied on the ground that the dealers were not formally appointed by the manufacturer, and the departmental challenge to the grant of Modvat credit failed.

Final Conclusion: The appeal was rejected and the order allowing Modvat credit was sustained in favour of the assessee.

Ratio Decidendi: For the relevant pre-July 1994 period, Modvat credit cannot be disallowed merely because the dealer issuing the invoice was not specifically appointed as an authorised dealer by the manufacturer, if the transaction otherwise satisfied the governing notification requirements.

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