TaxTMI 
TaxTMI 
2005 (4) TMI 89
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....eal are that, some time in November, 1994 M/s. Essar Gujarat Ltd. imported a consignment of 4426.796 M.T. of shredded scrap and cleared the same under three bills of entry on payment of duty. Out of the said 4426.796 M.T., M/s. Essar Gujarat Ltd. gave on loan 3314.159 M.T. of shredded scrap to the appellant. On receipt of the said goods, the appellant took credit of duty amounting to Rs. 27,83,198/- being the amount equivalent to the customs duty paid by M/s. Essar Gujarat Ltd. on 3314.159 M.T. of shredded scrap. 3. On 23rd November, 1995 a show cause notice was issued to the appellant on the ground that the appellant had taken credit of duty on the basis of delivery challans issued by M/s. Essar Steel (a division of Essar Gujarat Ltd.) and that on the basis of delivery challans, credit of duty cannot be taken under Rule 57G of the Central Excise Rules. By the said show cause notice, the appellant was called upon to show cause as to why action should not be taken for wrongly availing Modvat credit on the basis of documents which are not covered under Rule 57G of the Central Excise Rules. By its reply letter dated 29th February, 1996, the appellant denied the allegations co....
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.... (at Para 3) has accepted the fact that the appellant had produced the triplicate bills of entry to establish that the credit taken was in respect of goods covered under the said bills of entry on which duty was paid. Mr. Jaykar submitted that Rule 57G of the Central Excise Rules does not state that for taking credit of duty the bill of entry should be in the name of the party claiming credit of duty or the same should be endorsed in the name of that party. 6. Mr. Jaykar further submitted that the Tribunal was in error in relying upon its decision in the case of Balmer Lawrie & Co. Ltd. v. Commissioner of Central Excise, Kanpur [2000 (116) E.L.T. 364 (Tribunal)] and Tata Iron & Steel Co. Ltd. v. Commissioner of Central Excise, Jamshedpur reported in 2001(137) E.L.T. 761. He submitted that in the case of Balmer Lawrie, the Larger Bench of the Tribunal was not concerned with the issue of taking credit of duty on the basis of the Bill of entry and, therefore, the said decision is wholly distinguishable on facts. As regards the decision of the Tribunal in the case of Tata Iron & Steel Co. Ltd. (supra) the Counsel for the appellant submitted that the said decision erroneously p....
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....ed in his factory and the inputs intended to be used in each of the said final products and such other information as the said Assistant Collector may require, and obtain a dated acknowledgement of the said declaration. A manufacturer who has filed a (2) declaration under sub-rule (1) may, after obtaining the acknowledgement aforesaid, take credit of the duty paid on the inputs received by him : Provided that no credit shall be taken unless the inputs are received in the factory under the cover of an invoice, issued under Rule 52A, an AR-1, or Bill of Entry or any other document as may be prescribed by the Central Government by notification in the Official Gazette in this behalf evidencing the payment of duty on such inputs. Provided further that having regard to the period that has elapsed since the duty of excise was imposed on any inputs, the position of demand and supply of the said inputs in the country and any other relevant considerations, the Central Government may direct that with effect from a specified date, all stocks of the said inputs in the country, except such stocks lying in a factory, customs area [as defined in the Customs Act, 1962 (52....
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....;availing the credit of duty, what is required to be established under Rule 57G is that the inputs received are in fact duty paid. The procedure set out in Rule 57G of the Central Excise Rules is to ensure that the credit is taken on the basis of duty paid documents. The bill of entry is one such document set out in Rule 57G. The said rule does not require that the bill of entry should be in the name of the person claiming credit of duty. It is not in dispute that the goods imported and cleared on payment of duty by one person can be used as inputs and credit of duty can be claimed by another person by establishing that the imported duty paid goods have been received as inputs and that the importer has not taken credit of that duty. In the present case, it is established that the duty paid goods are received as inputs, however, the credit is denied on the ground that the Bill of entry is not endorsed in the name of the appellant. Rule 57G does not require that for taking credit of duty, the bill of entry should be endorsed in the name of the claimant. Counsel for the revenue could point out any provision of law in the Act or the Rules regarding the endorsement of bills of entry. In....