2004 (4) TMI 224 - AT - Central Excise

Summary

Issues:
Whether Modvat credit can be availed based on declaration on Bill of Entry in Customs House for transferring goods to appellants.

Analysis:
The appeals by M/s. Century N. F. Casting questioned the eligibility of Modvat credit based on a declaration made on the Bill of Entry for transferring goods. The appellants, manufacturing Aluminum alloy, purchased aluminum scrap from a registered dealer who imported the material. The Customs Authority endorsed the Bill of Entry confirming the transfer to the appellants. The appellants argued that Modvat credit could be availed based on the endorsed Bill of Entry, citing relevant Circulars issued by the Board. They referenced Circulars from 1995 and 1996 allowing Modvat credit based on endorsed Bill of Entry. Additionally, they relied on a High Court decision and previous tribunal cases supporting the validity of endorsed Bill of Entry for availing credit.

The Departmental Representative countered, citing Rule 57G of Central Excise Rules and claiming that endorsed Bill of Entry is not a specified duty paying document for Modvat credit. They pointed out that the dealer's invoices were marked as "non-modvatable," indicating that Modvat credit could not be claimed. Referring to a Notification amending Rule 57G, the Department argued that previous Circulars were no longer applicable under the amended rule. They cited a tribunal case where Modvat credit was denied for endorsed Bill of Entry.

The Tribunal considered both arguments and found that the endorsed Bill of Entry, as per Circulars from 1995 and 1996, was a valid document for availing Modvat credit. They noted that the Circulars remained applicable even after the Rule amendment, as the duty paid documents specified included the triplicate copy of Bill of Entry. The Tribunal highlighted a Public Notice clarifying the process of availing credit based on endorsed Bill of Entry. They rejected the Department's contention that Circulars were no longer valid post-amendment. The Tribunal also distinguished a previous case where the Board's Circulars were not considered, thus setting aside the Department's decision and allowing both appeals.