Modvat credit on endorsed bill of entry upheld where internal transfer to the manufacturing unit met circular conditions.

Modvat credit was allowed where the bill of entry was endorsed by an assessee's head office to its own manufacturing division and the goods were received in original packed condition. The endorsement was treated as an internal transfer within the same corporate entity, not as a transfer between two independent manufacturers. As the Board circular conditions were satisfied, namely receipt of the full consignment in original condition and endorsement for delivery to the manufacturing unit, credit could not be denied. The Larger Bench ruling on endorsed invoices between independent manufacturers was held inapplicable on these facts, and the Revenue's appeal failed.

---

---

Issues: Whether Modvat credit could be denied when the bill of entry was endorsed by the assessee's head office to its own division and the goods were received in the manufacturing unit in original packed condition.

Analysis: The endorsed bill of entry was not treated as a transfer between two independent manufacturers but as an endorsement within the same corporate entity from the head office to one of its divisions. The conditions stated in the Board's circular were satisfied, namely receipt of the entire consignment in original packed condition and endorsement by the head office for delivery in the manufacturing unit. The Larger Bench decision dealing with endorsement of invoices between independent manufacturers was held inapplicable on the facts.

Conclusion: Modvat credit was admissible and the Revenue's appeal failed.

---