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TMI Blog2010 (6) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2002 and Rule 9 of the Cenvat Credit Rules, 2004. 3. The relevant facts of the case in brief are that the appellants are engaged in the manufacture of power transmission belts, rubber belts and other items and for the purpose of setting up of its plant, the machinery equipments were imported from M/s. Bando Singapore Pte. Ltd., while the work of installation of the plant was being entrusted to M/s. Mitsui Kensetsu India Limited. 4. On June 15, 2003 the Singapore Company issued a Letter of Intent to Mitsui for supply, erection and installation of machinery and other civil work, for the setting up of the factory at Gurgaon (Haryana). In Paragraph 8 of the Letter of Intent (hereinafter referred to as 'LOI'), it was mentioned that the Singapore company is the promoter and proposed to set up a company in India, under the name of Bando India Pvt. Ltd. It was also mentioned that necessary steps had been initiated to incorporate the said company in India and on incorporation thereof, the LOI would be assigned and transferred to Bando India Pvt. Ltd. (the appellant in the present appeal). 5. Pursuant to the LOI, Mitsui placed an order on the Singapore Company, for supply of equipment f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 2005 (192) E.L.T. 82 (Bom.) confirmed by the Apex Court in the matter of Union of India v. Marmagoa Steel Ltd., reported in 2008 (229) E.L.T. 481 (S.C.) as also that of the Gujarat High Court in the matter of Vimal Enterprise v. Union of India reported in 2006 (195) E.L.T. 267 (Guj.) submitted that the records clearly disclose that the credit was availed in relation to the duty paid goods which were factually received in the factory premises of the appellants and were utilised by the appellants and, therefore, the authorities below erred in denying the credit to the appellants. 13. Learned DR on the other hand, placing reliance in the decision of the Tribunal in the matter of Forma Pack Industries v. CCE, Delhi-II reported in 2005 (192) E.L.T. 525 (Tri.- Del.) as also drawing our attention to Rule 9 of the Cenvat Credit Rules, 2004 submitted that the appellants were not entitled to claim credit on the basis of the document which could not be the basis for claiming the cenvat credit in view of the specific provisions comprised under Rule 9 of the said Rule. He further submitted that the decisions sought to be relied upon are on the basis of Rule 57A read with Rule 57G of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said company in terms of Indian Companies Act, 1956 much prior to import of the goods in question. On incorporation of such company in India, the Letter of Intent was to be assigned and transferred to such company in India which was to enter into a detailed agreement with the contractor and to issue the works order for installation of the factory. 18. The Letter of Intent further specifically mentioned that "terms and conditions of this LOI shall be legally binding on Bando India, and all payments shall be made to you under this LOI/contract by Bando India, failing which we stand full guarantee to you for all the payments due and payable to you under this LOI/contract". The above letter of intent read with the bill of entry and bill of lading apparently discloses that the goods under the bill of entry were for the appellants and further there being no dispute that the said goods were subjected to the payment of duty and were directly transported to the premises of and utilized by the appellants and that the contractor had not availed the credit, one fails to understand as to how the appellants could be denied the benefit of the credit. 19. Undoubtedly, Rule 7(1) of the Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y due on the inputs has been paid and such inputs have actually been used or are to be used in the manufacture of final products, and such Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise shall record the reasons for not denying the credit in each case. 22. Similarly, sub-rule (2) of Rule 9 of the CENVAT Credit Rules, 2004 provides that no cenvat credit under sub-rule (1) shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994, as the case may be, are contained in the said document 'provided that if the said document does not contain all the particulars but contains the details of duty or service tax payable, description of the goods or taxable service, assessable value, Central Excise or Service tax registration number of the period issuing the invoice, as the case may be, name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service, and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event the misuse of the modvat claims and any fraud being played by a manufacturer. Being a beneficial legislation, its object of input duty relief to a manufacturer should not be defeated on a technical and strict interpretation of the Rules governing modvat". 25. The Bombay High Court in Marmagoa Steel case while considering scope of Rule 57G has held thus :- "10. For availing the credit of duty, what is required to be established under Rule 57G is that the inputs received are in fact duty paid. The procedure set out in Rule 57G of the Central Excise Rules is to ensure that the credit is taken on the basis of duty paid documents. The bill of entry is one such document set out in Rule 57G. The said rule does not require that the bill of entry should be in the name of the person claiming credit of duty. It is not in dispute that the goods imported and cleared on payment of duty by one person can be used as inputs and credit of duty can be claimed by another person by establishing that the imported duty paid goods have been received as inputs and that the importer has not taken credit of that duty. In the present case, it is established that the duty paid goods are received as inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer for taking credit for the duty paid on the inputs received by him. A bare reading of Rule 52A shows that no excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorized agent. Rule 52A, therefore, applies to a situation where goods are cleared from a factory or a warehouse to the place of assessee. For such a situation the proviso in Rule 57G stipulates that no credit shall be taken unless the inputs are received in the factory under the cover of an invoice issued under Rule 52A. However, that situation does not arise in this case for the simple reasons that the importer M/s. Essar Gujarat Limited had loaned the goods to the assessee (which transaction is not doubted in the show cause notice). Further the goods were transferred directly by the importer to the Unit of the assessee from the Port. Therefore, the goods never went to the manufacturing Unit of M/s. Essar Gujarat Limited. For such a situation the proviso to sub-rule (2) of Rule 57G states that the relevant document indicating payment of duty would be Bill of Entry. 11. Now in the present case, as far as Bills of Entry dated 30th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma Pack Industries case was in a totally different set of facts as well as on the basis of the Board Circular dated 29-2-1996. In any case, in view of the decision of the Bombay High Court confirmed by the Apex Court in Marmagoa Steel case and other decisions referred above, we find that the said ruling in Forma Pack Industries case cannot be applied to the facts in the case in hand. 31. The contention of the department that there is no provision for endorsement of the credit and therefore the appellants are not entitled to claim credit on the basis of the endorsement is devoid of substance for more than one reason. Firstly, the credit is taken not because of endorsement but on the basis of bill of entry which also disclosed the name of the appellant, apart from the fact that the goods accompanying the Bill of entry were subjected to the payment of duty, and on clearance, were directly transported to the appellant's factory premises and were utilized by the appellants for installation of their factory, and no credit in respect of duty paid on those goods was taken by the contractor. Secondly, the effect of endorsement is only to amend the name of consignee and nothing more. Black' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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