Modvat credit on reassessed bill of entry accepted; reassessment date governs, and no separate customs certificate was needed.

Additional customs duty credit was admissible on a reassessed bill of entry where project import clearance was later cancelled and the goods were reassessed on merits. The relevant date for availing Modvat credit was the date of reassessment and payment of the differential duty, not the original filing date of the bill of entry. Rule 57E was inapplicable because the matter was not one of adjustment between supplier and recipient of inputs. As the bill of entry itself evidenced payment of the additional duty, no separate customs certificate was required. Denial of credit and the penalty were therefore unsustainable.

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Issues: Whether Modvat credit of additional customs duty was admissible on the basis of the reassessed bill of entry, whether the six-month period for taking credit had to be counted from the date of reassessment and payment of differential duty, and whether a separate customs certificate was necessary under Rule 57E.

Analysis: The goods were initially cleared under project import and were later reassessed on merits when the project import registration was cancelled. The reassessment was completed on 8-3-1999 and the differential duty was paid thereafter. The bill of entry itself was treated as a valid duty paying document. On these facts, the relevant date for taking credit was the date of reassessment and not the original date of filing of the bill of entry. The case was also held not to be one of adjustment between supplier and receiver of inputs, so Rule 57E was found inapplicable. Since the additional duty payment stood evidenced by the bill of entry, no separate certificate from the customs authorities was required.

Conclusion: The credit was admissible and the denial of Modvat credit and penalty could not be sustained.

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