2002 (1) TMI 1063 - AT - Central Excise

Summary

Issues:
1. Allowance of Modvat credit on endorsed exbond Bill of Entry.
2. Permissibility of credit when duty paying documents are not in favor of the manufacturer.
3. Recognition of endorsed documents as proper duty paying documents for Modvat credit.

Issue 1: Allowance of Modvat credit on endorsed exbond Bill of Entry:
The Commissioner (Appeals) allowed Modvat credit to the appellant based on the CEGAT's decision in the case of CCE, Jaipur v. Dugar Tetenal (I) Ltd., which permitted Modvat credit on endorsed Bill of Entry. The Tribunal's decision was followed, allowing the benefit of Modvat credit on an endorsed exbond Bill of Entry to the appellant.

Issue 2: Permissibility of credit when duty paying documents are not in favor of the manufacturer:
The appellants argued that Modvat credit could be permissible even if the duty paying documents accompanying the goods are not in favor of the manufacturer. They referred to previous decisions of the Tribunal in cases like Larsen & Toubro Ltd. v. CCE, Bhuvaneshwar, and Amal Rasayan Ltd. v. CCE. The Commissioner (Appeals) noted that Modvat credit cannot be denied solely on technical grounds, especially when the entities involved are part of the same company. The Commissioner relied on the Tribunal's decision in Larsen & Toubro Ltd. v. CCE, Bhuvaneshwar to allow Modvat credit on the endorsed gate pass.

Issue 3: Recognition of endorsed documents as proper duty paying documents for Modvat credit:
In the Revenue appeal, it was argued that the endorsed exbond Bill of Entry and the Gate Pass were not recognized as proper duty paying documents for Modvat credit. The appellants contended that only endorsed Bill of Entry in the case of High Sea Sale was recognized as a duty paying document for Modvat credit. However, the Commissioner (Appeals) found that the procedural discrepancy of the documents not being in the name of the party or endorsed in their favor did not warrant denial of the substantive right to Modvat credit. The Commissioner dismissed the appeal, stating that there was no infirmity in the decision to allow Modvat credit based on the documents presented.

This judgment clarifies the allowance of Modvat credit on endorsed documents, the permissibility of credit even when duty paying documents are not in favor of the manufacturer, and the recognition of endorsed documents as proper duty paying documents for Modvat credit. The decision emphasizes substantive rights over procedural discrepancies in availing Modvat credit, as long as the essential criteria are met.