Endorsed Bill of Entry and Customs-countersigned declaration support Cenvat credit even for part-consignment transfers.

Cenvat credit on capital goods remained available where an endorsed Bill of Entry was supported by the importer's declaration identifying the recipient manufacturing unit and countersigned by Customs. The separate annexure of that declaration, rather than its physical attachment on the Bill of Entry, did not invalidate the document when the prescribed Board circular requirements were otherwise met. Credit also could not be denied merely because the transfer involved part of a consignment, especially where duty payment and receipt of goods were not disputed and the documentary conditions were substantially complied with.

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Issues: Whether Cenvat credit on capital goods could be denied when the goods were transferred as part consignment on the strength of an endorsed Bill of Entry and supporting declaration countersigned by Customs.

Analysis: The Board circular permitted a manufacturer other than the importer to avail credit on the strength of a Bill of Entry endorsed by the proper Customs officer when the goods were diverted to the manufacturing unit named in the declaration. The declarations made by the importer identified the appellant unit and were duly countersigned by Customs. The fact that the declaration was separately annexed and not pasted on the reverse of the Bill of Entry did not make it invalid. The Revenue did not dispute duty payment by the importer or receipt of the goods by the appellant. The Tribunal also noted that the objection based on the goods not moving directly from the docks was not part of the original denial and, in any event, did not defeat credit where the other requirements of the circular were met.

Conclusion: The appellant was entitled to Cenvat credit on the basis of the endorsed Bill of Entry and the duly countersigned declaration, even though the transfer was of a part consignment.

Final Conclusion: Denial of credit was unsustainable because the documentary requirements prescribed by the Board had been substantially complied with and the part-consignment transfer did not by itself bar availment of credit.

Ratio Decidendi: Where the importer's declaration identifying the recipient unit is duly countersigned by Customs, an endorsed Bill of Entry constitutes a valid duty-paying document for availing credit, and credit cannot be denied merely because the transfer relates to only part of the consignment or the declaration is separately annexed.

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