JUDGMENT
S.L. Peeran
This is a Revenue appeal against Order-in-Appeal No. 9/97 dated 9.1.97 passed by the Commissioner of Customs & Central Excise (Appeals), Trichy by which he has granted the modvat credit which had been rejected by the AC in the Order-in-Original on the ground that the Bill of Entry cannot be endorsed to the third party. The Commissioner has referred to the order of the AC and has held that the Bill of Entry can be endorsed to the third party for availing the modvat credit on the duty paid by the importer. The findings recorded by the Commissioner (Appeals) in paras-4 to 6 of his order is reproduced herein below:-
4. In the grounds of appeal and also during the personal hearing, the appellants have stated that even after 1-4-94 (introducing the invoice system), no change was made wit reference to availing of credit on the basis of triplicate copy of bill of entry. Therefore, credit could not be denied if it was taken on the basis of endorsed bill of entry. They have also pointed out that the reviewed procedure for registration of the importer as a dealer fro issuing invoice etc., vide Trichy Collectorate Trade Notice No. 25/95 was prescribed only in March’95 based on Board’s circular dt: 13-2-95. Since their case is earlier to this period, credit could not be disallowed in their case. The appellants have also placed reliance on the Tribunal decisions referred to above.
5. I find force in the above pleadings of the appellants. In the cited case laws, the Tribunal have clearly held that the modvat credit on endorsed bill of entry has to be allowed where the entire consignment imported was endorsed in favour of the assessee and if the quantity of input indicated in the endorsed bill of entry is also received in the appellant’s premises and that no credit has been availed by the importer since such endorsement in a valid evidence of duty payment at the hands of the manufacturer purchasing the imported material. Since in the subject case, the Assistant Commissioner Trichy has also certified that 1500 HT of steel malting scrap imported by M/s. East Coast Steels Ltd. and endorsed to the appellants have been consumed by the said appellant in their electric induction furnace during the months of September’92 to November;94 the credit cannot be disallowed merely for the reason that the bills of entry ware not in the (SIC) of the appellants but were only endorsed in their favour. From the endorsement made by the importer on the reverse of the bill of entry also it is soon that the importer had declared that they had not availed the modvat credit of the countervailing duty paid by them nor applied for refund of the same. Respectfully following the ratio of the above CEGAT decisions, the appeal has to be allowed.
6. In the light of the above discussion, I allow the appeal.
2. Revenue has taken a sole ground that the endorsement can be made done only by the Registered office to its factory and endorsement cannot be made to the third party. If further submits that Board’s circular referred to by the Commissioner deals with the situation where the Board has clarified that Bill of Entry which is in the name of Registered Office Head Office but credit is availed by its manufacturing unit, then same can be done on endorsement and the Board’s circular No. 179/13/96-CX dated 29.2.96 does not referred to endorsement to a third party.
3. Arguing for the appellant revenue, Ld.DR Shri Jayachandran seeks for allowing the appeal on the basis of grounds made out by the Commissioner in the impugned order.
4. Ld. Counsel Shri Murugappan submits that this issue has been examined by this Bench in the case of TULSYAN NEC LTD v. CCE Chennai, 1999 (33) RLT 659 (CEGAT) and have clearly held that modvat credit can be utilized when it is endorsed to a third party. He submits that this finding will clearly apply to the facts of the case and the appeal is required to be rejected. Further more, he contends that in the case of TULSYAN NEC LTD (supra), the Tribunal has examined the previous judgments on this point and the consistent view taken by all the benches is that endorsed bill of entry can be accepted for grant of modvat credit. In this regard, he refers to the judgment rendered by the Delhi Bench in the case of CCE v. INDIA POLY PACKS, 2000 (40) RLT 727, Revenue’s appeal was rejected on the same ground by applying the judgment cited therein. He also relies on the judgment of RAMACHANDRA REXINS LTD v. CCE Bangalore, 2000 (89) ECR 577 (T) passed by this Bench allowing appellant’s appeal where the authorities below had rejected the modvat credit as the Bill of Entry had been endorsed.
5. On a careful consideration of the submissions and on examination of the judgments cited supra, we find that this issue has been gone into in great detail in the case of TULSYAN NEC LTD. (supra) by this bench and a clear finding recorded in para-8 that the endorsed bill of entry is a valid document for grant of modvat credit. The findings recorded in paras-7 to 9 are extracted herein below:-
7. With respect to the limitation issue, we find that the general principle in law which is well laid down is that wherever there is a lay stay granted by a competent judicial authority, any limitation provided in any statute shall exclude that period of stay from the limitation prescribed in the statute. This principles has been clearly laid down by the Hon’ble Supreme Court in the case of Gandhi Grah Nirman Sahkari Samiti Ltd. reported in 1993 (66) ELT 47 (S.C.). We find that when the Hon’ble High Court of Madras had stayed the removal of the goods from customs custody until their further orders, it would be illogical as well as unjust to compute into the 6 months time limit this period of stay by the Hon’ble High Court. Therefore, we have to exclude the said period of stay from the 6 months time limit. We find in this connection that the relevant date appears to be 15.05.96, as the importers of the goods have claimed to have received the Hon’ble High Court’s order permitting the sale on 14.05.96. There is nothing on record to dispute or question this date. We also find that though the show cause notice has mentioned the period of credit from 25.07.96 to 30.11.96, however, the Order-in-Original has clearly mentioned in page 2 of the order that the entire consignment was received on or before 27.09.96 as could be seen from the entries made on the reverse of the Bill of Entry. Since the time period between the relevant date noted above and the date on which the last MODVAT credit instalment was entered in the appellants RG 23A Part II is much less than 6 months, therefore, we find that the entire credit was taken within time and this allegation in the show cause notice does not survive on facts.
8. With respect to the issue of endorsed Bill of Entry, being a valid document for MODVAT credit or not, we find that while learned SDR cites the circular of the Central Board of Excise & Customs noted above as well as a case law of 1987, however, much water has flowed since then. It is now an established legal position that an endorsed Bill of Entry even for non high sea sales, would be a valid document for taking MODVAT credit. We come to this conclusion in view of the decision contained in the case of Kay Polyplast Ltd. supra, wherein, it has been held that a Bill of Entry endorsed in favour of a third party, wherein the importer has also declared that no MODVAT credit has been availed by him, would be a valid evidence for duty payment and that such an endorsement would, therefore, qualify the document for MODVAT credit. However, it was for the authorities to satisfy the genuineness of these facts. The said judgment relied upon the decision in the case of Krishna Insulations reported in 1995(7) RLT 59 and the Final Order of the Tribunal dated 07.09.95 in Krishna Strips Ltd. In the case of Superpax India Private Ltd. supra, it has been held by the Hon’ble Tribunal that the duty paid character of the Bill of Entry is not changed by the endorsement thereon and, therefore, and endorsed Bill of Entry remains a valid duty paid document under Rule 57G. A similar view has been taken by the Hon’ble Tribunal in the case of CCE v. Bharat Wire Products reported in 1997 (21) RLT 578 (CEGAT) = 1998 (99) ELT 297 (Tri.) In the case of CCE v. Amartara Ltd. supra, the Tribunal has held that since the identify of imported goods and their linkage till receipt by the manufacturer is established by an endorsed Bill of Entry, therefore, MODVAT credit under this cannot be denied under Rules 57A and 57G. Again, we find that in the case of Maharaja International Ltd. supra, it has been held that a reference to High Court has been denied on this issue.
9. In view of the plethora of decisions examined above, we are clearly of the considered view that the matter is a partly covered one and applying the ratio of these decisions, we find that the Order-in-Appeal impugned as well as the Order-in-Original is required to be set aside in view of the discussions noted above. Ordered accordingly.
6. We notice that in the case of RAMACHANDRA REXINS LTD (supra), same view was expressed and endorsed bill of entry was accepted as a valid document for grant of modvat credit. So also, in the case of CCE v. INDIAN POLY PACKS. In view of above settled ratio of the judgments, holding that endorsed Bill of Entry is a valid document for grant of modvat credit, there is no merit in the revenue appeal and the same is rejected accordingly.
(Dictated and pronounced in open Court)