2005 (6) TMI 375 - AT - Central Excise

Summary

Issues:
1. Denial of Modvat credit for defective goods due to Bill of Entry not in the name of the appellant.

Analysis:
The appellant filed an appeal against the order-in-appeal passed by the Commissioner (Appeals) regarding the denial of Modvat credit for defective goods received in the factory because the Bill of Entry was not in the appellant's name. The appellant, a manufacturer of Bulk Drugs, had cleared goods to M/s. Jal Health Care, which were later exported and received back as defective. The Bill of Entry for the returned goods was endorsed in the appellant's name by M/s. Jal Health Care and attested by Customs Officers. The Revenue objected to the credit claiming the Bill of Entry was not in the appellant's name.

The appellants had cleared the goods to M/s. Jal Health Care, which were then exported and returned as defective, a fact undisputed by the Revenue. The Bill of Entry for the returned goods was endorsed to the appellant by M/s. Jal Health Care and Customs Officers. A circular issued by the Board allowed for credit availing in such cases. The goods were manufactured by the appellants, exported, received back as defective, and then cleared after rectification. The denial of credit solely based on the Bill of Entry not being in the appellant's name was deemed unsustainable and set aside, allowing the appellant's appeal.

In conclusion, the Appellate Tribunal CESTAT, New Delhi, ruled in favor of the appellant, allowing the Modvat credit for defective goods despite the Bill of Entry not being in the appellant's name. The judgment highlighted the manufacturing process, export, return, and rectification of the goods, emphasizing the entitlement of the appellant to the credit based on the circular and the endorsement of the Bill of Entry in the appellant's name.