2014 (9) TMI 870 - AT - Central Excise

CENVAT Credit - endorsed Bills of Entry - duty paying documents - Extended period of limitation - Held that - Endorser M/s. Parle Products Pvt. Ltd. submitted to the department Bills of Entry wise declarations to the effect that all goods imported under the respective Bills of Entry have been transferred to M/s. K.N. Food Industries Pvt. Ltd. Further, receipt of goods by the appellants and their actual use in the manufacture of the final products (which the appellants manufactured on behalf of M/s. Parle Products Pvt. Ltd.) is not in question at all. In the wake of this, it is difficult to fathom as to how the appellants can be held guilty of suppression of facts. The Show Cause Notice was issued on 14.02.2011 while the impugned Bills of Entry are dated 17.09.2007, 19.06.2008 and 23.09.2008 and thus the impugned demand will also be hit by time bar presuming that the imposed credit was taken within a reasonable time of a few months from the dates of Bills of Entry (The date of taking impugned Cenvat credit is not mentioned in the Show Cause Notice or in the Order-in-Original and Order-in-Appeal - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of Cenvat Credit based on endorsed Bills of Entry.
2. Validity of endorsed Bills of Entry as documents for availing Cenvat Credit.
3. Requirement of endorsement by the corporate office for validity.
4. Interpretation of Rule 57G of the Central Excise Rules.
5. Suppression of facts and time-barred demand.

Analysis:
1. The appeal was filed against the disallowance of Cenvat Credit of Rs. 8,46,525 based on endorsed Bills of Entry. The Commissioner (Appeals) held that endorsed Bills of Entry are not valid documents for availing Cenvat Credit, contrary to the original adjudicating authority's decision.

2. The advocate for the appellant cited several judgments in their favor, emphasizing that Rule 57G does not require the bill of entry to be endorsed in the name of the claimant. The advocate argued that the duty paid goods were received as inputs, and the credit should not be denied based on endorsement technicalities.

3. The Assistant Commissioner contended that endorsed Bills of Entry are valid only when endorsed by the appellant's corporate office, as per the Board's Circular dated 29.02.1996.

4. The Judge referred to the Hon'ble Bombay High Court's decision in the case of Marmagoa Steel Ltd. vs. Union of India, emphasizing that Rule 57G aims to ensure duty paid inputs. The Judge concluded that the appellant had established the duty paid nature of the goods used as inputs, and the credit should not be denied based on lack of endorsement.

5. The Judge noted that the appellant had informed the department about the credit based on endorsed Bills of Entry. The Judge also highlighted that the Show Cause Notice was issued after a significant time from the dates of Bills of Entry, possibly falling under the time-bar provision.

6. Considering the judicial precedents and the evidence provided, the Judge ruled in favor of the appellant, allowing the appeal and setting aside the Order-in-Appeal related to the disallowed Cenvat Credit.