Full Judgment
2. The relevant facts for the consideration are that the appellant had availed Modvat Credit on the modvatable invoices issued by registered dealer. It is the allegation of the Department that such modvatable invoices are in aelligible invalid documents for availing Modvat credit as the said dealer did not have a godown or had no premises to deal in excisable goods. Based only on these allegations, Adjudicating Authority confirmed the demand and also imposed penalty on the appellant. On an appeal, the Commissioner (Appeal) also upheld the view of the Adjudicating Authority.
3. The Ld. S.D.R. submits that the availment of the credit by the Appellant in this case is totally wrong in as much as that the Registered Dealer has issued modvatable invoices without having any premises from where he is supposed to deal in the excisable goods. The Ld. D.R. also relies upon Circular No. 96/7/95 dated-13/2/95 and submits that as per the circular , the Registered dealer should have a godown or office premises for issuing the modvatable invoices.
4. Considered the submissions made by the Ld. S.D.R. and perused the records. I find that the Show Cause Notice as issued to the appellants does not allege the non-receipt of the inputs by the appellants and consumption thereof in the appellant's factory. I also find that the registered dealer of invoices was also not served with a notice to produce the documents related to the dispatches of modvatable invoices issued by him from his premises.
5. I find that in the Order in Original the Adjudicating Authority has come to a conclusion that "Further, as per Rule 57GG, the said registered dealer failed to produce any evidence showing receipt, storage and final dispatch of the goods in question from their godown".
For coming to this conclusion, it is imperative that the said registered dealer should have been put on notice and he should have been directed to produce the documents. In the absence of any such direction or notice to the registered dealer, the Adjudicating Authorities coming to the conclusion of denial of Modvat Credit to the appellants does not hold good. Further, I find that it is not in dispute that the registered dealer invoices are regular invoices issued by him for modvatable inputs. If the Registered Dealer did not have any godown, the registration issued to him should have been cancelled by the Revenue Authorities which is not coming out from the records before me.
6. In the absence of cancellation of the registration of the registered dealer for not having registered premises or godown, the modvatable invoices issued by him cannot be faulted with by the Revenue in the form of disallowing the Modvat Credit to the appellants.
7. Under the circumstances as mentioned above, the order in appeal deserves to be set aside. Accordingly, I set aside the order in appeal with consequential relief if any, to the appellant.