Relief to Tata Steel: CESTAT allows CENVAT Credit based on Endorsed Bill of Entry [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) Eastern Zonal Bench, Kolkata, has delivered a favourable judgment for Tata Steel Limited. The tribunal allowed the appeal of Tata Steel, permitting the company to avail CENVAT Credit based on endorsed bills of entry, marking a pivotal moment in the interpretation of the CENVAT Credit Rules, 2004, providing clarity on the admissibility of endorsed documents for claiming tax credits.

The Excise Appeal evolved from an Order issued by the Commissioner of Central Excise & Service Tax, Jamshedpur. The central issue revolved around the denial of CENVAT Credit to Tata Steel based on the endorsed bill of entry, which was deemed improper by the Revenue authorities under Rule 9(1) of the CENVAT Credit Rules, 2004.

The appellant, represented by Shri Prasad Paranjape and Dhruvi Shah contended that the facts of the case were undisputed. The company had purchased raw materials from an importer, who raised commercial invoices and endorsed the bills of entry in Tata Steel’s name. This endorsement enabled Tata Steel to claim the CENVAT Credit for the Countervailing Duty (CVD) paid at the time of import.

The appellant cited precedents, including a crucial judgment by the Bombay High Court in Marmagoa Steel Ltd. v. Union of India [2005 (192) E.L.T. 82 (Bom.)], wherein it was established that an endorsed bill of entry could be used to claim CENVAT Credit. This judgment was further affirmed by the Supreme Court.

The respondent revenue, Commissioner of Central Excise & Service Tax Jamshedpur, represented by Shri P. K. Ghosh, argued that an endorsed bill of entry is not a valid document for availing CENVAT Credit.

The two-member bench of CESTAT comprising Shri Ashok Jindal ( Judicial Member ) and Shri K. Anpazhakan ( Technical Member ) observed that the central issue was whether an endorsed bill of entry is a proper document for availing CENVAT Credit. The bench noted that the Bombay High Court had previously addressed this issue, ruling in favour of the assessee.

Quoting the Bombay High Court’s decision, the CESTAT bench highlighted that Rule 57G of the Central Excise Rules does not mandate that the bill of entry must be in the name of the person claiming the credit. What is essential is that the inputs received are duty-paid and that the duty-paid goods are used as inputs in the manufacturing process. The endorsed bill of entry, coupled with the commercial invoices, satisfied this requirement.

The CESTAT concluded that Tata Steel had established that the imported duty-paid goods were received and utilised as inputs in its factory, and the importer had not claimed the CENVAT Credit on these goods. Therefore, denying the credit on the basis that the bill of entry was endorsed was unfounded.

In result, the tribunal set aside the impugned order and the appeal is allowed with consequential relief. Tata Steel is permitted to avail the CENVAT Credit on the strength of the endorsed bill of entry, granting consequential relief. This ruling not only provides relief to Tata Steel but also to other manufacturers facing similar disputes regarding the admissibility of endorsed documents for claiming tax credits.

To Read the full text of the Order CLICK HERE 

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