Cenvat credit on imported capital goods depends on substance of declaration and customs endorsement compliance.

Cenvat credit on imported capital goods diverted to the appellant's unit was considered admissible where the reverse of the Bill of Entry contained a declaration showing the clear purpose of diversion, even though the form of the declaration was questioned for non-compliance with the Board's circular. The substance of the declaration was treated as more important than its form, provided it satisfied Circular No. 179/13/1996-C.X. dated 29-2-1996. Because a customs officer's signature also appeared below the declaration, the authorities were required to examine properly whether the customs endorsement requirement had been fulfilled. The denial of credit was therefore not sustained at that stage, and reconsideration on endorsement was warranted.

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Issues: Whether Cenvat credit on imported capital goods diverted to the appellant's unit was admissible when the declaration on the Bill of Entry was alleged to be non-compliant with the Board's circular.

Analysis: The declaration made on the reverse of the Bill of Entry conveyed the clear purpose of diverting the imported machines to the appellant for availing Cenvat credit. The form used was immaterial so long as the substance of the declaration satisfied the requirement of the Board's Circular No. 179/13/1996-C.X., dated 29-2-1996. Since a signature of a customs officer also appeared below the declaration, the authorities below had not properly examined whether the endorsement requirement had been fulfilled.

Conclusion: The appellant was entitled to have the matter reconsidered on the question of customs endorsement, and the denial of credit was not sustained at this stage.

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