2002 (4) TMI 173 - AT - Central Excise

CEGAT Appellate Tribunal allows Modvat credit appeal on Bill of Entry, deems sister concern's endorsement valid.

The Appellate Tribunal CEGAT, New Delhi allowed the appellants' appeal regarding the disallowed Modvat credit on a Bill of Entry. The Tribunal deemed the ... Modvat credit - endorsement of bill of entry by head office - endorsement of bill of entry by sister concern/branch - interpretation of C.B.E.C. circulars - receipt of consignment in original packing - penalty for wrongful availment/denial of creditModvat credit - endorsement of bill of entry by head office - endorsement of bill of entry by sister concern/branch - interpretation of C.B.E.C. circulars - receipt of consignment in original packing - Entitlement to Modvat credit where the Bill of Entry was in the name of a sister concern and was endorsed in favour of the appellants though that concern was not shown as the head office/registered office. - HELD THAT: - The Tribunal examined the application of Board instructions which permit endorsement of a Bill of Entry in the name of a head office/registered office for grant of Modvat credit to a manufacturing unit, noting that the lower authorities treated the endorsement facility as confined to documents in the name of the head office and required that the entire consignment be received in original packing by the factory. The Tribunal found the departmental objection-that the Bill of Entry was in the name of a sister concern which was not the appellants' head/registered office-to be tenuous in the factual matrix: the appellants produced no evidence that the Ram Tirath Road unit was not treated as their head office in departmental records, and there was no dispute that the entire consignment covered by the Bill of Entry was received. In light of these facts, the strict application of the circular to deny Modvat credit was rejected and the impugned denial was set aside.Modvat credit allowed to the appellants; the order denying the credit set aside.Penalty for wrongful availment/denial of credit - Validity of the penalty imposed by the Deputy Commissioner in consequence of the disallowance of Modvat credit. - HELD THAT: - Since the Tribunal found the disallowance of Modvat credit to be untenable on the facts and set aside the impugned order, the consequential imposition of penalty by the Deputy Commissioner could not be sustained. The appellate allowance of the claim necessarily undermines the basis for the penalty imposed for that disallowance.The penalty imposed by the Deputy Commissioner set aside along with the disallowance of Modvat credit.Final Conclusion: The appeal is allowed: the impugned orders denying Modvat credit and imposing penalty are set aside and the appellants are held entitled to the Modvat credit on the impugned Bill of Entry in the circumstances of the case. The Appellate Tribunal CEGAT, New Delhi allowed the appeal of the appellants regarding the disallowed Modvat credit on a Bill of Entry. The Tribunal found that the endorsement by a sister concern was valid as both units were related, and the appellants had received the entire consignment. The appeal was allowed, and the impugned order was set aside.