Modvat credit on capital goods cannot be denied where the bill of entry is endorsed in favour of the assessee.

Modvat credit on capital goods could not be denied merely because the goods were imported by another entity, where the bill of entry was endorsed in favour of the assessee. Ownership of the goods was not treated as decisive for denying credit, and the endorsed bill of entry supported the assessee's entitlement. On that basis, the ground for denial did not survive, and credit was held admissible.

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Issues: Whether Modvat credit on capital goods could be denied merely because the goods were imported by another entity, when the bill of entry was endorsed in favour of the assessee.

Analysis: The capital goods were imported by M/s. Frito Lay India, but the bill of entry was endorsed in favour of the respondent. The governing principle applied was that ownership of the goods is not decisive for denying Modvat credit, especially in view of the Board circular dated 1-3-1999. Since the endorsement was made in favour of the respondent, the basis for denial of credit did not survive.

Conclusion: Modvat credit on the capital goods could not be denied to the assessee.

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