Modvat credit on endorsed bill of entry held not time-barred where goods were received in lots

Modvat credit was treated as available on inputs covered by an endorsed bill of entry, because the six-month restriction in Rule 57G(5) was said to apply to documents that are issued in the relevant sense, and not to a bill of entry. The endorsed bill of entry stood in the assessee's name within six months, the first lot of goods was received within that period, and credit was taken on that basis. For later lots received piecemeal, credit was deferred until actual receipt of the goods, so the timing of those entries did not make the claim time-barred. The denial of credit was therefore considered unjustified.

---

---

Issues: Whether Modvat credit could be denied as time-barred under Rule 57G(5) of the Central Excise Rules, 1944 when the goods were covered by an endorsed bill of entry and were received in lots.

Analysis: The Tribunal held that the six-month restriction in Rule 57G(5) was not attracted to inputs received under cover of a bill of entry, since the rule refers to the issue of a document and a bill of entry is not issued in the relevant sense. It further found that the bill of entry was endorsed in the appellant's name within six months, the first lot was received within six months, and the credit entries were made on that basis. The later taking of credit in respect of subsequent lots was only because the goods were received piecemeal and credit could not be taken before receipt of the goods.

Conclusion: Denial of Modvat credit was unjustified and the issue was decided in favour of the assessee.

---