Cenvat credit on endorsed Bills of Entry and limitation: credit allowed, suppression not proved, demand held time barred.

Cenvat credit could not be denied merely because duty-paid imported inputs were supported by endorsed Bills of Entry, as the Bill of Entry was a recognised duty-paid document and the goods were shown to have been received and used. The demand also failed because the assessee had disclosed the transfers through bill-wise declarations, suppression was not established, and the notice was issued too late on the facts, making the claim time barred. Relief was therefore granted on both the credit and limitation issues.

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Issues: (i) Whether Cenvat credit could be denied merely because it was taken on the basis of endorsed Bills of Entry. (ii) Whether the demand was sustainable in the absence of suppression of facts and in view of limitation.

Issue (i): Whether Cenvat credit could be denied merely because it was taken on the basis of endorsed Bills of Entry.

Analysis: The governing requirement under Rule 57G of the Central Excise Rules was that the inputs received must be duty paid and that credit must rest on duty paid documents. The Bill of Entry was recognized as a permissible document, and there was no legal requirement that it must be endorsed in the claimant's name. The record showed receipt and use of the imported duty paid goods as inputs, and no prejudice was shown from the endorsement aspect.

Conclusion: The denial of Cenvat credit on the ground that the Bills of Entry were endorsed was unsustainable and was set aside in favour of the assessee.

Issue (ii): Whether the demand was sustainable in the absence of suppression of facts and in view of limitation.

Analysis: The materials showed that the department had been informed through bill-wise declarations that the goods were transferred to the assessee, and the actual receipt and use of the goods were not in dispute. In these circumstances, the allegation of suppression was not made out. The notice was also issued much later than the dates of the Bills of Entry, and the demand was held to be time barred on the facts.

Conclusion: The allegation of suppression failed and the demand was barred by limitation.

Final Conclusion: The impugned appellate order was set aside to the extent challenged, and the assessee obtained relief on both the credit and limitation issues.

Ratio Decidendi: Credit cannot be denied when duty paid inputs are proved to have been received and used, merely because the Bill of Entry is endorsed in another's name, and a demand cannot survive where disclosure is made and the claim is otherwise time barred.

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