Cenvat credit on endorsed Bills of Entry needs Customs endorsement; complete pre-deposit waiver was declined.

Complete waiver of pre-deposit was refused where Cenvat credit was claimed on endorsed Bills of Entry that lacked endorsement by the Customs Officer required under the governing circular. The applicants' reliance on the prescribed-document rule and curative protection for incomplete particulars was not accepted because they were independent manufacturers and did not fall within the specific transfer or diversion situation covered by the circular. The absence of Customs endorsement created a prima facie weakness in the credit claim, so only partial relief was granted and the balance duty and penalty were stayed subject to a deposit of Rs. 20 lakhs.

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Issues: Whether the applicants were entitled to complete waiver of pre-deposit in a case involving availment of Cenvat credit on endorsed Bills of Entry without endorsement by the Customs Officer.

Analysis: The credit claim was founded on Bills of Entry endorsed in favour of the applicants, but the endorsements were not made by the Customs Officer as contemplated by the Board's circular governing diversion or transfer of imported goods. The applicants relied on the prescribed-document rule and the curative protection against denial of credit for incomplete particulars, but the facts showed that they were independent manufacturers and not covered by the specific situation contemplated in the circular. The absence of Customs endorsement therefore created a prima facie weakness in the claim and did not justify total waiver of the duty and penalty pre-deposit at this stage.

Conclusion: Complete waiver of pre-deposit was declined; the applicants were required to deposit Rs. 20 lakhs, and pre-deposit of the balance duty and penalty stood waived for hearing of the appeal.

Final Conclusion: The interlocutory relief was granted only in part, and the appeal was directed to proceed after compliance with the conditional deposit requirement.

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