Modvat credit cannot be denied where endorsed ex-bond Bills of Entry substantially satisfy documentary transfer requirements.

Modvat credit could not be denied merely because inputs were transferred from a private bonded customs warehouse under an endorsed ex-bond Bill of Entry rather than a Superintendent's certificate. The endorsed Bill of Entry was treated as consistent with Board instructions for transfer by the original consignee to another manufacturer, so long as credit had not already been taken or refund claimed. Full clearance from the bonded warehouse under the ex-bond Bill of Entry was treated as materially different from piecemeal removal from an outside godown, and the documentary requirement was held to have been substantially complied with.

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Issues: Whether Modvat credit could be denied on the ground that the inputs were transferred from a private bonded customs warehouse under an endorsed ex-bond Bill of Entry instead of a certificate from the Superintendent.

Analysis: The endorsement on the Bill of Entry was treated as consistent with the Board's instructions where the original consignee transfers imported goods to another manufacturer for availing Modvat credit, provided it is that credit has not already been taken or refund claimed. The goods were transferred in full from the bonded warehouse on clearance under ex-bond Bill of Entry, which was considered materially different from piecemeal removal from an outside godown. In these circumstances, the documentary requirement was held to have been substantially complied with.

Conclusion: The denial of Modvat credit was unjustified, and the appeal was allowed in favour of the assessee.

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