Endorsed bill of entry can support Modvat credit on imported inputs when it evidences sale and no double benefit is claimed.

An endorsed bill of entry can serve as a valid duty-paying document for Modvat credit on imported inputs when it records the sale by the importer to the manufacturer and shows that no Modvat credit was earlier taken or refund claimed by the importer. Rule 57G(2) permits credit on a bill of entry or other prescribed document evidencing duty payment, and endorsement does not by itself deprive the document of that character. The department may verify receipt, accounting, and linkage of the goods with the document, but credit cannot be denied solely because the bill of entry is endorsed.

---

---

Issues: Whether Modvat credit was admissible on imported goods on the strength of an endorsed bill of entry as a valid duty-paying document.

Analysis: Rule 57G(2) permits credit on the basis of a bill of entry or other prescribed document evidencing payment of duty. An endorsed bill of entry does not cease to be a bill of entry merely because it is endorsed. Where imported goods are sold by the importer to a manufacturer and the endorsement records the sale and the fact that no Modvat credit has been availed or refund claimed by the importer, the endorsed bill of entry can serve as valid evidence for the purchaser. The department may still verify receipt, accounting, and linkage of the goods with the document, but absence of objection on those aspects cannot justify denial of credit solely because the bill of entry is endorsed.

Conclusion: Modvat credit was held admissible on the strength of the endorsed bill of entry, and the denial of credit was set aside.

Ratio Decidendi: An endorsed bill of entry may constitute a valid duty-paying document for Modvat credit on imported inputs when it evidences the sale and there is no double benefit claimed, subject to verification of receipt and accounting of the goods.

---