2015 (2) TMI 36 - AT - Central Excise

CENVAT Credit - Capital goods - endorsed bill of entry - Held that - The fact of receipt of capital goods and their duty paid character is also not in dispute. It is further not in dispute that the importer has also availed the credit on the same Bill of Entry. The technical and procedural objection raised by the Revenue is that Bill of Entries have not endorsed. I find that the said objection of the Revenue is too hyper-technical and not, prima facie, acceptable. Ld. JCDR submits that if the Bill of Entries itself is not endorsed, the same would lead to gross misutilisation of the facility of Cenvat credit which cannot be appreciated in the present case inasmuch as the fact of receipt of the goods and duty paid character stands verified by the Range Superintendent in favour of the assessee. Further, the fact of endorsement in the Bill of Entry is only to indicate and establish that the goods covered in the said Bill of Entry stands actually supplied to the recipient which object and purpose is clearly obtained by giving a separate declaration. I really fail to understand that when the importer himself has given a separate declaration, the purpose of endorsement on the Bill of Entries is absolutely lost and cannot be adopted as a reason for denial of Cenvat credit. - Stay granted.

Summary

Issues: Denial of Cenvat credit and penalty on the ground of endorsement on Bill of Entries.

The judgment addresses the denial of Cenvat credit amounting to Rupees 14,11,278 along with a penalty imposed on the applicants due to the absence of endorsement on the Bill of Entries for capital goods not in the name of the applicants. The applicants, however, presented separate invoices and declarations from importers confirming the sale of capital goods to them, asserting their entitlement to the Cenvat credit.

Upon reviewing the impugned order, it was acknowledged that the capital goods were received by the applicants, their duty paid status was undisputed, and the importer had also availed credit on the same Bill of Entry. The Revenue's objection regarding the lack of endorsement on the Bill of Entries was deemed hyper-technical and not prima facie acceptable. The Range Superintendent had verified the receipt of goods and their duty paid nature in favor of the assessee, rendering the purpose of endorsement redundant when the importer had provided a separate declaration.

The Tribunal found the Revenue's objection unjustified and dispensed with the requirement of pre-deposit of duty and penalty, unconditionally allowing the stay petition. The judgment emphasizes the practical fulfillment of the objective behind endorsement on Bill of Entries and the importance of considering the substance of transactions over technicalities in matters of Cenvat credit entitlement.