Endorsed Bill of Entry qualifies for Modvat credit when prescribed endorsement procedure is followed for diverted imported goods.

An endorsed Bill of Entry can serve as a valid duty-paying document for Modvat credit where imported goods are diverted from the customs dock area or bonded warehouse to a manufacturing unit and the prescribed endorsement procedure is complied with. Credit cannot be denied merely because the Bill of Entry was endorsed instead of being originally issued in the manufacturer's name, especially where there is no allegation of non-compliance with the procedure and no contrary binding instruction. The Revenue challenge therefore fails on this point.

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Issues: Whether an endorsed Bill of Entry is a valid duty-paying document for availing Modvat credit.

Analysis: The Board's orders recognised that credit should not be denied where imported goods lying in the customs dock area or bonded warehouse are diverted to a manufacturing unit and the prescribed endorsement procedure is followed. The record showed no allegation that the prescribed procedure had not been complied with. In the absence of any contrary decision or binding instruction, there was no basis to deny credit merely on the ground that the Bill of Entry was endorsed instead of being issued in the name of the manufacturing unit.

Conclusion: An endorsed Bill of Entry was held to be an acceptable duty-paying document for Modvat credit, and the Revenue's challenge failed.

Ratio Decidendi: Where the Board permits credit on imported goods diverted to a manufacturing unit and the prescribed endorsement procedure is complied with, Modvat credit cannot be denied merely because the Bill of Entry is endorsed rather than originally filed in the manufacturer's name.

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