ORDER
V.K. Agrawal, Member (T)
1. The issue involved in these appeals, arising out of common Order-in-Original passed by the Commissioner, is regarding availability of Modvat Credit of duty paid on capital goods imported by M/s. Maruti Udyog Ltd. and sent to M/s. Agro Engg. Works.
2. Shri. B.L. Narashimhan, learned Advocate, submitted that M/s. Agro Engg. Works, Appellant No. 2 manufacture various automobile components, which are sold to M/s. Maruti Udyog Ltd., Appellant No. 1; that as the components, manufactured by Appellant No. 2, are meant for supply to M/s. Maruti Udyog Ltd., the dyes & fixtures, necessary for the manufacture of these components, are imported by M/s. Maruti Udyog Ltd. from abroad; that in March 2000, M/s. Maruti Udyog Ltd. imported a consignment of dyes and fixtures and as the same were meant to be supplied to Appellant No. 2, M/s. Maruti Udyog Ltd. filed a declaration at the time of assessment of the Bill of Entry itself to the effect that C.V. duty, paid on the imported goods, would be taken as Modvat by Appellant No. 2 and not by M/s. Maruti Udyog Ltd.; that, accordingly, the registration No., the Range, etc. of Appellant No. 2 were indicated in the Bill of Entry, which was in accordance with the procedure prescribed in Board’s Circular No. 179/13/96-CX dated 29.2.96; that this endorsement was also duly attested by the Appraiser of Customs House. He, further, mentioned that though, initially, Appellant No. 2 was procuring dyes and fixtures under some leasing arrangements, they purchased dyes and fixtures in 2001 from Maruti Udyog Ltd.; that Maruti Udyog Ltd. took the imported goods in the original pack condition to their factory and, thereafter, supplied the same in the same condition to Appellant No. 2 under non-returnable gate pass alongwith the triplicate copy of he endorsed Bill of Entry bearing the endorsement of Modvat Credit to be availed of by Appellant No. 2; that the Commissioner, under the impugned order, has disallowed the Modvat Credit to Appellant No. 2 on the ground that Maruti Udyog Ltd. had not issued any invoices under Rule 52A to enable them to take Modvat Credit as the ownership of dyes vested with Maruti only. He, further, submitted that the issue of invoice, based on endorsed Bill of Entry, is no longer res integra as in the case of Mark Auto Industries Ltd. v. CCE, Delhi, 2003 (89) ECC 79 (T) : 2003 (106) ECR 649 (T) and Jai Bharat Maruti Ltd. v. CCE, New Delhi [Final Order No. A/57/03-NB (C) dated 13.1.2003], CEGAT has held that credit can be taken by the vendors, based on the endorsed Bill of Entry. He, finally, mentioned that on the aspect of ownership of capital goods, the Tribunal in the case of German Remedies Ltd. v. CCE, Goa, 2002 (144) ELT 606 (T), which has been followed in the case of Rasandik Engineering Industries (I) Ltd., v. CCE, Noida [Final Order No. 1165-66/02-NB (D) dated 11.12.2002], held that the ownership of capital goods is not a pre-condition for availing of the Modvat Credit.
3. Countering the arguments, Shri D.N. Coudhary, learned SDR, submitted that the Board’s Circular dated 29.2.96, is not applicable to the facts of the present matters inasmuch as the goods were not diverted by the importer M/s. Maruti Udyog Ltd. to M/s. Agro Engg. Works and were rather brought to the factory of Maruti Udyog Ltd. and only after some days, the goods were sent to Appellant No. 2; that once the excisable goods have been received by M/s. Maruti Udyog Ltd., the journey of the Bill of Entry is over and it is no more valid for taking the Modvat Credit by M/s. Agro Engg. Works to whom the goods have been sent from the premises of Maruti Udyog Ltd. after lapse of sometime; that for availing the Modvat Credit by M/s. Agro Engg. Works, there has to be a separate duty-paying document, which is lacking in this matter; that in the absence of duty-paying documents, Modvat Credit cannot be availed of; that the sale has taken place much after the goods have been received by Appellant No. 2. As such, there was neither any sale of the goods by M/s. Maruti Udyog Ltd. to M/s. Agro Engg. Works nor the same had been cleared on lease or on loan from a finance company.
4. We have considered the submissions of both the sides. The undisputed facts in these matters are that dyes and fixtures were imported by M/s. Maruti Udyog Ltd. and at the time of clearance of the goods, they had made an endorsement on the Bill of Entry itself that the goods will be used by M/s. Maruti Udyog Ltd. and Modvat Credit would also be availed of by. Appellant No. 2, i.e., M/s Agro Engg. Works. The undisputed fact is that the goods, instead of moving to the factory premises of Appellant No. 2, went first to the premises of M/s. Maruti Udyog Ltd. and from there, after some days, went to the premises of M/s. Agro. Engg. Works. It has also not been disputed by the Revenue that the goods remained in packed condition at the premises of M/s. Maruti Udyog Ltd., and they had also not taken Modvat Credit in their books of accounts. It has also not been disputed by the Revenue that dyes and fixtures have been used by Appellant No. 2 in the manufacture of dutiable finished goods and their value has been included in the entire cost of the finished products. In view of these facts, the only point remains to be decided is whether the movement of goods to the factory premises of Appellant No. 2, through the factory premises of Appellant No. 1, will make them ineligible for the Modvat Credit. The Appellate Tribunal has held in the case of Mark Auto Industries Ltd. (supra) that the Modvat Credit can be availed of on the basis of endorsement made on the Bill of Entry, which has been duly approved by the Customs authorities relying upon the Board’s Circular dated 29.2.96. In our view, the mere delay in sending the goods directly to the premises of Appellant No. 2 should not come in the way of availing the Modvat Credit when all other formalities, as required under the Board’s Circular, have been complied with. The learned Advocate has also relied upon the decision of the Tribunal in the case of German Remedies Ltd. (supra), wherein it has been held that the requirement of direct purchase and transfer of property in the name of the manufacturer (Appellant No. 2) were not pre-requisite condition for allowing the credit. Thus, following the ratio of these decisions, we hold that Appellant No. 2 is eligible to take Modvat Credit of the duty paid on dyes and fixtures by M/s. Maruti Udyog Ltd. Consequently, no penalty is imposable on M/s. Maruti Udyog Ltd. We, therefore, allow both the appeals.