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of <h1>No CENVAT Credit Allowed Without Genuine High Sea Sale or PD Bond Execution Under Customs Rules</h1> <h3>Mukund Brass Industries Versus The Commissioner Of Central Excise & Customs</h3> Mukund Brass Industries Versus The Commissioner Of Central Excise & Customs - 2025:GUJHC:43986 - DB ISSUES: Whether credit of duty paid on inputs purchased on High Seas basis is allowable when Bills of Entry are filed in the name of the original importer rather than the purchaser.Whether the adjudicating authority erred in not considering the remand directions of the Commissioner (Appeals) requiring ascertainment of certain facts. RULINGS / HOLDINGS: Credit of duty paid on inputs imported on High Seas basis is not allowable merely because the Bills of Entry were filed in the name of the original importer; the purchaser must comply with conditions including endorsement of Bills of Entry and payment of customs duties directly to Customs. The Tribunal correctly held that 'the high sea purchaser steps into the shoes of importer and has to file bills of entry with the customs' and that absence of endorsement or declaration on Bills of Entry invalidates the claim.The appellate authority's refusal to grant credit on consignments covered by Bills of Entry not in the appellant's name was upheld, as the so-called High Sea Sale Agreements were found to be 'created as an after-thought' and contradicted vital import documents, evidencing no real High Sea Sale transaction.The question regarding non-consideration of the Commissioner (Appeals) order dated 07.01.1999 was declined to be answered as it pertained to findings of fact. RATIONALE: The Court applied the statutory framework under the Central Excise Tariff Act, 1985, Central Excise Rules, 1944 (notably Rule 57H and Rule 57GG), and relevant Notifications Nos. 32 and 33 of 1994, which prescribe conditions for availing MODVAT/CENVAT credit including proper documentation and registration requirements.The legal principle that a High Seas Sale requires the purchaser to 'step into the shoes of the importer' by filing Bills of Entry in their name, endorsing the Bills of Entry, paying customs duties, and complying with customs formalities was emphasized, consistent with the Customs Act and Import Policy Regulations.The Court accepted the detailed factual findings of the appellate authority and Tribunal that the purported High Sea Sale Agreements lacked authenticity, were not supported by endorsements or declarations on Bills of Entry, and that duties and charges were paid by the original importers, not the appellant, thereby negating the claim for credit.No doctrinal shift or dissent was noted; the Court affirmed established principles regarding the admissibility of CENVAT credit and the necessity of compliance with procedural and documentary requirements under the relevant statutory scheme.
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