Modvat credit cannot be denied when delayed Bill of Entry endorsement was caused by Customs, not the importer.

Modvat credit cannot be denied merely because Bills of Entry were endorsed after six months from the date of import where the delay was caused by Customs authorities and not by the assessee. Credit under the Modvat procedure depends on endorsement by the proper officer, but once the assessee receives the endorsed Bills and takes credit promptly, the Revenue cannot penalise it for administrative delay attributable to the authorities themselves. The operative effect is that delayed endorsement by Customs does not, by itself, defeat otherwise eligible credit when the importer is not responsible for the delay.

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Issues: Whether Modvat credit could be denied on the ground that the Bills of Entry were endorsed after the period of six months from the date of import when the delay in endorsement was caused by the Customs authorities.

Analysis: Credit under the Modvat procedure was dependent on endorsement of the Bills of Entry by the proper officer. The assessee took credit immediately after receiving the endorsed Bills. The delay in endorsement was not attributable to the assessee but to the Customs authorities. A party cannot be made to suffer for a delay caused by the authorities themselves, and the same principle applies to the Revenue.

Conclusion: The credit could not be denied on account of the delay in endorsement, since the delay was caused by the Customs authorities and not by the assessee.

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