ORDER
V.K. Agrawal, Member (J)
1. In this appeal, filed by M/s. Urastan Metal Industries Pvt. Ltd., the issue involved is whether Cenvat Credit, paid on capital goods, is available to them on the basis of endorsed Bill of Entry in respect of part consignment.
2. Shri B.L. Narasihman, learned Advocate, submitted that the appellants manufacture automobile components as per the requirements and specifications of M/s. Maruti Udyod Ltd. (MUL) for the manufacture of which they use dyes and fixtures supplied by MUL; that MUL imported certain dyes and fixtures under a Bill of Entry dated 24.3.2000 and supplied part of the consignment to them after getting the Bill of Entry duly endorsed by the Customs Authorities; that the Revenue has disallowed the Cenvat Credit on the ground that the consignment cannot be split into different parts and the entire consignment should have been endorsed to the appellants. The learned Advocate, further, submitted that endorsed Bill of Entry is a proper document for availing the Cenvat Credit in terms of Board’s Circular No. 179/13/96-CX.8 dated 29.2.1996 which allows a manufacturer other than the importer of goods to take credit on the strength of Bill of Entry, provided the same is endorsed by the proper officer of the Customs for enabling the manufacturing unit to avail the credit; that in the said circular, the Board had considered the question whether credit is available in respect of imported goods lying in Customs dock area/bonded warehouse which are diverted to manufacturing units in whose name Bill of Entry has not been filed; that the Board has clarified that where the imported goods are still in Customs dock area and the manufacturer/importer decides to divert/transfer the goods, a declaration by the manufacturer/importer can be made on the reverse of triplicate copy of Bill of Entry by the manufacturer/importer that consignments are being delivered to the unit for availing credit and endorsed by the proper officer of the Customs for enabling the manufacturing unit to avail the credit; that in the said circular, the Board has not mentioned that the entire consignment has to be so diverted. He has also relied upon the decision in the case of Jay Bharat Maruti Ltd. v. CCE, New Delhi, 2003 (56) RLT 48 (T) wherein it has been held that the endorsed Bill of Entry is a valid duty-paying document. Reliance has also been placed on the decision in the case of Mark Auto Industries Ltd. v. CCE, 2003 (106) ECR 649 (T).
3. Countering the arguments, Shri Vikas Kumar, learned SDR, submitted that circular dated 29.2.96 permits a manufacturing unit to avail of the credit of the duty paid by importer only on fulfilment of certain conditions; that one of the conditions is that a declaration is made by the importer on the reverse of the triplicate copy of Bill of Entry to the effect that the consignment is being delivered to the unit; that no such endorsement has been made on the reverse of the triplicate copy of Bill of Entry; that the said circular nowhere provides that the consignment can be split into various parts and Bill of Entry can be endorsed to different manufacturing units; that, on the other hand, paragraph 7 of the said circular, clearly provides that in case of split consignments, the inputs can be cleared on the payment of duty as envisaged under Rule 57F/57S and on the basis of such duty paying documents credit can be availed; that as para 7 of the circular clearly provides procedure for availing the credit in case of split consignments, the same should have been followed by the appellants and MUL in the present matter; that, therefore, para 4 of the circular on which the reliance has been placed by the learned Advocate, is not applicable to the facts of the present matter. He also mentioned that the consignment has not been directly sent from docks to the premises of the appellants; that the goods were first brought by MUL to their godowns and there from only these goods were sent to the appellants; that it is evident from the statement of Shri Rajesh Taneja, Director of the appellants, who had clearly stated in his statement that only a part consignment of dyes and checking fixtures was transferred by M/s. MUL from their premises at Gurgaon against non-returnable gate pass dated 21.4.2000; that this statement has never been retracted by Shri Rajesh Taneja.
4. We have considered the submissions of both the sides. The capital goods, in question, were imported by M/s. Maruti Udyog Ltd. and the duty was paid by them under Bill of Entry No. 103050 dated 24.3.2000; that Board’s circular dated 29.2.96 provides that a manufacturing unit can take the credit of the duty paid by the importer if he makes the declaration on the reverse of the triplicate copy of Bill of Entry about transferring the goods to a manufacturing unit, whose name is mentioned in the said declaration. We find that two declarations were made by MUL in respect of consignments imported by them under the cover of Bill of Entry No. 103050 in the name of M/s. VEE GEE Enterprises and M/s. Urastan Metal Industries Pvt. Ltd. In the said declaration, besides mentioning the Bill of Entry no. and date, M/s. MUL had mentioned the name of the consignees, the range number, the Central Excise division no. and the place. We, therefore, observe that the goods, which were to be diverted to both the consignees, were also mentioned separatly in the declarations. A perusal of the show cause notice and the Adjudication Order and impugned Order reveals that the Revenue has not disputed the payment of duty by M/s. MUL and the receipt of the goods by the appellants. The show cause notice was issued mainly on the ground that the duty has been borne by M/s. MUL, lease agreement had not been executed, the acquisition of capital goods by the appellants did not amount to sale/hire-purchase and that there is no provision for transfer of part consignment from docks. It has not been the case of the Revenue that the declaration made by M/s. MUL showing diversion of part consignment to the appellants, has not been signed by the proper Customs officer as required under the circular dated 29.2.96. The mere fact that the declaration was not pasted on the reverse of the Bill of Entry and it is separately annexed, does not make it a non-acceptable declaration particularly when it has been duly signed by the proper Customs officer. Once the declaration by M/s. MUL giving the name of the appellant unit for the purpose of availing the Modvat Credit has been duly countersigned by the Customs Authorities, no fault can be found with the appellants in availing of the Cenvat Credit on the basis of such declaration duly countersigned by the proper Customs officer. As the appellants have availed the Cenvat Credit on the basis of documents specified by the Board in its circular dated 29.2.96, the credit cannot be disallowed to them. The learned SDR has emphasised that fact that Shri Taneja, Director of the appellant company, had deposed in his statement that the consignee has first reached the godown of M/s. MUL and has not come directly from docks and as such the circular, in question, does not apply.
First of all, we observe that no such case was ever made by the Department in the show cause notice issued to them. The Adjudicating Authority has disallowed the credit as the appellants had failed to produce any purchase document/lease document and for want of any provisions for transfer of part consignment from docks in terms of circular dated 29.2.96. The Commissioner (Appeals) also has not dealt with the said issue in the impugned Order. Secondly, in the case of Maruti Udyog Ltd. (Final Order No. A/628-29/03-NB(C) dated 27.10.2003), the Tribunal has held that “the mere delay in sending the goods directly to the premises of the 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.” We, therefore, set aside the impugned Order and allow the appeal.