Full Judgment
The lower appellate authority held, by relying on the Tribunal's decision in Bengal Safety Industries v. CCE, Calcutta-I [1997 (92) ELT 81 (T)] and another decision of the Tribunal, that the requirement of registration of dealer for the purpose of issuing modvatable invoice was only procedural and Modvat credit was not to be denied for want of such registration.
2. Heard both sides. Learned DR for the appellant submits that the view taken in the cases relied on by the Commissioner (Appeals) has been overruled by the Tribunal's decision in Balmer Lawrie & Co. Ltd. v.CCE, Kanpur [2000 (116) ELT 364 (T). The Larger Bench held that the requirement of registration of dealer for the purpose of issuing modvatable invoices was mandatory and that it was not open to anyone to avail Modvat credit on any input on the basis of invoice issued by unregistered dealer. According to learned DR, the credit in question is not admissible to the respondents in view of the Larger Bench decision.
The learned Consultant for the respondents, on the other hand, submits that the credit was not taken solely on the basis of dealer's invoices.
The dealer's invoices were accompanied by the manufacturer's invoices also. It is further submitted that the requirement of registration of dealer was not there prior to 4.7.1994.
3. I have considered the submissions. It is not in dispute that any dealer wanting to issue modvatable invoices was required to get registered with the department under Rule 174 of the Central Excise Rules 1944. But this requirement was laid down only from 4th July 1994 vide Notification No. 32/94-CE(NT). Before that date, there was no such requirement. Hence the credit taken on inputs prior to 4.7.1994 on the basis of invoices issued by unregistered dealer should be admissible to the party. The position, however, is different for the subsequent period. The above notification stipulated that the dealer must be registered with the department under Rule 174 to issue modvatable invoices. The Board also has clarified this position through circular.
In a lenient view, the Board granted time upto 31st December 1994 to dealers for getting registered with the Department for the aforesaid purpose. In the instant case, the respondents have no case that the dealers concerned had obtained registration on or before 31st December 1994. Therefore, the credit taken on the basis of unregistered dealer's invoices continued to be inadmissible beyond 31.12.1994. Such credit cannot be allowed in view of the Larger Bench decision cited by the DR.The case law relied on by the lower appellate authority is found to have been expressly overruled by the Larger Bench. The impugned order, therefore, is set aside to the extent it relates to the credit taken during the period 4.7.1994 to 30.7.1994. I have already held that the credit taken on the basis of dealer's invoices issued period to 4.7.1994 is admissible to the party. To this limited extent, the impugned order will stand affirmed. The appeal is disposed of accordingly.