Procedural lapse in bill of entry endorsement does not by itself defeat Modvat credit where eligibility is otherwise shown.

Procedural non-compliance with endorsement requirements on the bill of entry under Rule 57G(2) was held not, by itself, to defeat a Modvat credit claim where eligibility otherwise appeared established. Relying on prior Tribunal decisions, the Tribunal accepted that procedural formalities should not override substantive entitlement. On that basis, it waived the pre-deposit and stayed recovery in favour of the assessee at the interim stage.

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Issues: Whether non-compliance with the procedural requirement relating to endorsement on the bill of entry under Rule 57G(2) of the Central Excise Rules, 1944 disentitled the assessee from Modvat credit and justified insistence on pre-deposit.

Analysis: The Tribunal noted that the credit claim was resisted on the ground that the bill of entry procedure had not been strictly followed, but the appellant relied on prior Tribunal decisions taking the view that procedural formalities should not defeat credit where eligibility is otherwise established. The Tribunal accepted that view and held, at the interim stage, that non-observance of procedure alone was not a sufficient reason to deny the benefit or require pre-deposit when the claim otherwise appeared eligible.

Conclusion: The requirement of pre-deposit was waived and recovery was stayed, in favour of the assessee.

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