2026 (2) TMI 1334 - AT - Central Excise

Bills of Entry endorsement allows Cenvat credit where duty paid status and receipt/use of inputs are undisputed.

Endorsed Bills of Entry constitute valid documentary basis for availing Cenvat credit where the duty paid status of inputs and their receipt and use by ... Cenvat credit - manufacturer/job worker - Endorsed Bill of Entry - contravention of Rule 9 of Cenvat Credit Rules, 2004 (CCR) - requirements of valid documents for availment of Cenvat credit - credit taken on the basis of endorsement - Bill of Entry as evidence of duty paid character - Bills of Entry in the name of the original importer but endorsed in favour of the manufacturer/job worker - effect of amendment to Rule 9 w.e.f. 01.04.2014 Endorsed Bill of Entry - Whether Cenvat credit can be availed by the appellant on the strength of Bills of Entry endorsed in their favour by the original importer. - HELD THAT: - The Circular No. 179/13/96 dated 09.02.1996, where, in view of certain difficulties in availment of credit due to different names etc., appearing on invoices, BoEs etc., a concept of endorsement of BoEs by importer was introduced for availing credit, subject to certain guidelines. Though, this was in the context of Rule 57G/57/T of erstwhile Central Excise Rules, but this is equally applicable in the context of BoEs under Rule 9 of CCR. This is a trade facilitation measure therefore when under erstwhile Rules endorsed BoE was a valid document then endorsed BoE even under Rule 9 of CCR can still be considered as a valid document for taking credit. Thus, the Tribunal found that Bills of Entry were expressly included within the list of documents under Rule 9 of the Cenvat Credit Rules and that, as a trade-facilitation measure, endorsed Bills of Entry have been recognised for availment of credit by earlier Board Circulars and decisions. Relying on the ratio of the Hon'ble Supreme Court in Union of India v. Marmagoa Steel Ltd.[2008 (7) TMI 95 - SUPREME COURT], the Tribunal held that a Bill of Entry, even if not originally in the name of the manufacturer seeking credit, cannot be denied effect so long as the duty-paid character of the goods and receipt/use of the inputs by the claimant are not in dispute. The Tribunal examined amendments to Rule 9 (w.e.f. 01.04.2014) introducing importer invoices and registration requirements, but concluded that the inclusion of importer invoices does not oust the continuing validity of Bills of Entry (including endorsed Bills of Entry) as permissible documents for taking Cenvat credit. The Tribunal further relied on coordinate decisions of the Bench and other Tribunals which have allowed credit on endorsed Bills of Entry where there is no doubt as to payment of duty or receipt/use of inputs by the claimant. Applying these authorities to the admitted facts (no dispute about receipt or use of materials), the Tribunal held that endorsed Bills of Entry constituted valid documents for availment of Cenvat credit in the present factual matrix. [Paras 8, 9, 10, 11, 12] Impugned order set aside; Cenvat credit legitimately availed on the strength of endorsed Bills of Entry and appeal allowed. Final Conclusion: In the factual matrix where receipt and duty-paid character of inputs were not disputed, the Tribunal held that endorsed Bills of Entry fall within the scope of Bills of Entry under Rule 9 of the Cenvat Credit Rules and accordingly allowed the appeal, setting aside the demand and penalty confirmed by the Adjudicating Authority. Issues: Whether Cenvat credit can be availed by a manufacturer/job worker on the strength of Bills of Entry that were in the name of the original importer but endorsed in favour of the manufacturer/job worker.Analysis: Rule 9 of the Cenvat Credit Rules, 2004 lists bills of entry among the documents on the strength of which credit may be taken. Earlier trade facilitation measures and administrative instructions, including Circular No. 179/13/96 dated 09.02.1996 and Public Notice No. 16/2006 dated 22.03.2006, recognised endorsed Bills of Entry as a basis for availing credit. Judicial precedents, including the ratio in Union of India v. Marmagoa Steel Ltd. (as applied to Rule 57G/Rule 52A of the Central Excise Rules, 1944) and subsequent coordinate-bench decisions, establish that where the duty-paid character of the goods and receipt/use of inputs by the claimant are not disputed, the fact that the Bill of Entry is not originally in the claimant's name does not by itself preclude credit. Amendments introducing an importer-issued invoice as an additional valid document (Notification No. 8/2014 dated 28.02.2014) do not negate the continuing validity of Bills of Entry as a document for credit. Applying these principles to the factual matrix where goods were received and used and the Bills of Entry were endorsed by the importer, endorsed Bills of Entry fall within the scope of acceptable Bills of Entry for availing Cenvat credit.Conclusion: Cenvat credit is admissible on the strength of Bills of Entry endorsed in favour of the claimant where the duty-paid character of the inputs and their receipt/use by the claimant are not disputed; the impugned demand based on denial of credit on endorsed Bills of Entry is set aside and the appeal is allowed in favour of the claimant.