2005 (2) TMI 737 - AT - Central Excise

Summary

Issues Involved:
Whether Cenvat credit is available for capital goods imported by one company but diverted to another company for manufacturing purposes.

Analysis:
In the appeal filed by M/s. International Tobacco Co. Ltd., the central issue revolves around the availability of Cenvat credit concerning capital goods imported by M/s. Godfrey Phillips India Ltd. The appellant, represented by Shri Ashok Sagar, argued that they manufacture cut tobacco and cigarettes on behalf of M/s. Godfrey.

Counterarguments were presented by Shri H.C. Verma, representing the Revenue, contending that the declaration made by M/s. Godfrey Phillips India Ltd. was not in the correct form, resembling a certificate more than a declaration. The Revenue highlighted that no official endorsement from Customs officers regarding the transfer of imported goods had been made, emphasizing that the term "passed out" in Customs pertains to container clearance rather than transfer endorsement.

Upon reviewing both sides' submissions, it was acknowledged that M/s. Godfrey Phillips India Ltd. had provided a specific endorsement on the Bill of Entry, confirming the transfer of imported goods to M/s. International Tobacco Co. Ltd. for Cenvat credit purposes. The endorsement was signed by the Deputy Manager (Purchase) on behalf of M/s. Godfrey Phillips India Ltd.

The dispute arose as the Revenue disallowed Cenvat credit for the capital goods, citing non-compliance with Circular No. 179/13/1996-C.X. The Circular required a specific declaration on the Bill of Entry for goods diversion, endorsed by a Customs officer. The appellant argued that the endorsement made by M/s. Godfrey Phillips India Ltd. met the Circular's requirements, as it clearly stated the diversion of goods to the appellants and was signed by the assessing officer.

The Tribunal found fault with the Commissioner (Appeals)'s decision, stating that the declaration/certificate made by M/s. Godfrey Phillips India Ltd. on the Bill of Entry's reverse side was indeed compliant with the Circular's essence. Notably, the signature of Shri Paramjit Singh below the declaration was overlooked by the lower authorities, prompting a remand for further examination. The Tribunal directed the matter back to the adjudicating authority to ascertain whether Shri Paramjit Singh's signature indicated Customs officer endorsement, ultimately allowing the appeal by remand.

This detailed analysis underscores the critical legal points, procedural compliance, and the Tribunal's decision to remand the case for further examination, ensuring a fair and thorough review of the Cenvat credit eligibility for the imported capital goods.