Per P.S. Bajaj : This appeal has been filed by the appellants against the impugned Order-in-Appeal dated 29.12.2000 passed by the Commissioner (appeals) who had affirmed the Order-in-Original dated 13.9.99 of the Deputy Commissioner disallowing the modvat credit of Rs. 5,74,296/- under Rule 57-I of the Rules and imposing penalty of Rs. 1,00,000/- on the appellants.

2. The facts are not much in dispute. The appellants claimed modvat credit of Rs. 5,02,872/- on the strength of bills of entry Nos. 7099 dated 20.4.95 and 135 dated 1.5.95 and the same has been disallowed on the ground that their name had been written by hand after tempering with the name and address of the importer. Similarly, the credit of Rs. 71,424/- availed by the appellants on the basis of invoice No. 9 dated 27.4.95 had been disallowed on the ground that the same was in the name of their head office and not in the name of their manufacturing unit. However, the modvat credit of Rs. 2,30,000/- had been allowed to the appellants. The order of the Deputy Commissioner disallowing the modvat credit of the above referred amount, had been affirmed by the Commissioner (appeals), through the impugned order.

3. The learned counsel has contended that the genuineness of the bills of entry Nos. 7099 and 135 had never been contested by the department and the goods even were released to the appellants provisionally covered by both those entries on execution of bonds and these bonds even had been lateron cancelled. Therefore, mere cuttings, in the bills of entries, could not lead to the conclusion that those had been tempered with, especially when actual receipt of the goods covered thereunder and their duty paid character, had not been doubted by the department at any stage. The modvat credit had been wrongly disallowed to the appellants.

4. The learned counsel, regarding invoice No. 9 dated 27.4.95, has contended that although it was in the name of the headoffice but the same was endorsed to the manufacturing unit by the headoffice and even prior intimation about the headoffice of the manufacturing unit of the appellants was given to the department. The receipt of the goods by the manufacturing unit and their duty paid nature had not been disputed by the department. Therefore, the modvat credit had been wrongly disallowed.

5. On the other hand, the learned JDR has simply reiterated the correctness of the impugned order.

6. I have heard both the sides and gone through the record.

7. Admittedly, the goods covered by two disputed bills of entry, referred to above, were released to the appellants on execution of bonds. They purchased the goods covered by these documents on high sea sale basis from Kanpur Wool Industries. There is nothing on the record to suggest if any investigation was carried out to ascertain that the importer Kanpur Wool Industries did not sell the goods to the appellants and that the goods were not duty paid. The fact that the goods were released provisionally to the appellants on execution of bonds by them and which had been even lateron cancelled, goes long way to show that the department did not doubt the genuineness of the bills of entry in question (detailed above). Therefore, no inference from the mere cuttings in the name and address of the importer, under these circumstances, could be drawn against the appellants, especially when the receipt of the goods by them and utilisation of the same had not been questioned by the department. Even the duty paid nature of those goods had not been challenged by the department. Therefore, in my view, the modvat credit of Rs. 5,02,872/- on the strength of both the disputed bills of entry Nos. 7099 dated 20.4.95 and 135 dated 1.5.95 had been wrongly disallowed to the appellants. They are entitled to get the modvat credit of this amount.

8. Similarly, the modvat credit of Rs. 71,424/- had been also improperly disallowed to the appellants. This invoice was no doubt in the name of the headoffice of the appellant company