2005 (4) TMI 471 - AT - Central Excise

Summary

Issues: Denial of MODVAT credit based on endorsed Bill of Entry

Analysis:
The appeal was filed against an order denying MODVAT credit due to the use of an endorsed Bill of Entry, deemed invalid as a duty-paying document. The appellants argued that they purchased the goods before Customs clearance, with the importer declaring the sale on the Bill of Entry, duly certified by Customs. They cited Circular No. 179/13/96-CX, stating that endorsements on Bills of Entry allow for credit when goods are transferred pre-clearance. The Revenue contended that credit based on an endorsed Bill of Entry was improper.

The Tribunal noted the Circular's requirement for declarations on Bills of Entry when goods are transferred before Customs clearance. In this case, the goods were transferred to the appellants pre-clearance, with the necessary declaration endorsed by Customs. Considering this and the Circular's provisions, the Tribunal ruled in favor of the appellants, setting aside the impugned order and allowing the appeal. The denial of credit based on the endorsed Bill of Entry was deemed incorrect in light of the factual circumstances and the Circular's guidance.

This judgment highlights the importance of compliance with Circulars issued by the Central Board of Excise and Customs in determining the validity of MODVAT credit claims based on endorsed Bills of Entry. The Tribunal emphasized the significance of proper declarations and endorsements by Customs authorities when goods are transferred before Customs clearance to ensure the legitimate availment of credit by manufacturing units. The ruling serves as a reminder of the procedural requirements and the need for adherence to Circulars for claiming such credits in excise and customs matters.