ORDER : S.H. Kapadia, J. Leave granted. In November 1994 M/s. Essar Gujarat Limited imported three consignments, in all, amounting to 4426.796 MT of shredded scrap and cleared the same under three bills of entry on payment of duty. Out of the said 4426.796 MT M/s. Essar Gujarat Limited gave a loan of 3314.159 MT of scrap to the respondent herein. On receipt of the said goods the respondent took credit of Rs. 27,83,198 (Rupees twenty-seven lakhs, eighty-three thousand and one hundred ninety-eight only) for the countervailing duty paid by M/s. Essar Gujarat Limited on 3314.159 MT of scrap. 2. For the sake of convenience we annexe hereinbelow the details of quantities imported by M/s. Essar Gujarat Limited and supplied to the respondent herein. Bill of entry Number and date Quantity covered by bill of entry Amount of countervailing duty paid Quantity supplied to the respondent MODVAT credit taken by the respondent F-84/94-95 dated 30-5-1994 1450.000 MT Rs. 12,17,696 1450.000 MT Rs. 12,17,696 F-90/94-95 dated 31-5-1994 1651.500 MT Rs. 13,86,914 1651.500 MT Rs 13,86,914 F-93/94-95 dated 6-6-1994 1325.296 MT 212.659 MT Rs 1,78,588 4426.796 MT 3314.159 MT Rs. 27,83,198 3. On 23-11-1995, a show-cause notice was issued to the assessee on the ground that it had taken credit of duty on the basis of only delivery challan issued by M/s. Essar Steel, a division of M/s. Essar Gujarat Limited. According to the Department, MODVAT credit could not have been taken under Rule 57-G of the Central Excise Rules merely on the basis of delivery challans. 4. By the said show-cause notice the assessee was called upon to show cause as to why action should not be taken for wrongly availing MODVAT credit on the basis of delivery challans and in that connection the Department placed reliance on Rule 57-G of the said Rules. The allegation made by the Department was denied. The assessee submitted that they had taken credit of duty in accordance with the provisions of the Central Excise Act and the Rules framed thereunder. 5. Suffice it to state that the Commissioner of Customs, Goa confirmed the demand and levied penalty. Aggrieved by the said order dated 26-9-1997, the assessee preferred an appeal before the Tribunal. By its order dated 11-8-2004 the Tribunal confirmed the duty but reduced the penalty/set aside the portion thereof. 6. 5. Suffice it to state that the Commissioner of Customs, Goa confirmed the demand and levied penalty. Aggrieved by the said order dated 26-9-1997, the assessee preferred an appeal before the Tribunal. By its order dated 11-8-2004 the Tribunal confirmed the duty but reduced the penalty/set aside the portion thereof. 6. The assessee preferred Central Excise Appeal No. 117 of 2004 in the Bombay High Court. The appeal stood allowed. Hence, this civil appeal is filed by the Department. 7. As can be seen from the chart quoted hereinabove, the total consignment of 4426.796 MT shredded scrap stood imported by M/s. Essar Gujarat Limited under three distinct bills of entry dated 30-5-1994, 31-5-1994 and 6-6-1994. As regards the bill of entry dated 6-6-1994 it may be mentioned that the bill of entry indicating payment of duty by the importer on the quantity, namely, 1325.296 MT was not produced. Only a certificate at p. 42 of the paper book, as issued by the Superintendent, Central Excise, Surat to the Superintendent, Central Excise, Goa came to be produced before the adjudicating authority. 8. At this stage we may quote the provisions of Rule 52-A and Rule 57-G: "52-A. Goods to be delivered on an invoice.?(1) No excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory, or his authorised agent. 57-G. Procedure to be observed by the manufacturer.?(1) Every manufacturer intending to take credit of the duty paid on inputs under Rule 57-A, shall file a declaration with the Assistant Collector of Central Excise having jurisdiction over his factory, indicating the description of the final products manufactured 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. (2) A manufacturer who has filed a 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 52-A, 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." On reading Rule 52-A the position which emerges broadly is that the said Rule refers to eligibility for claiming MODVAT credit, whereas Rule 57-G refers to procedure to be observed by the manufacturer for taking credit for the duty paid on the inputs received by him. 9. A bare reading of Rule 52-A shows that no excisable goods shall be delivered from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorised agent. Rule 52-A, therefore, applies to a situation where goods are cleared from a factory or a warehouse to the place of assessee. For such a situation the proviso in Rule 57-G stipulates that no credit shall be taken unless the inputs are received in the factory under the cover of an invoice issued under Rule 52-A. However, that situation does not arise in this case for the simple reason that the importer M/s. Essar Gujarat Limited had loaned the goods to the assessee (which transaction is not doubted in the show-cause notice). 10. Further, the goods were transferred directly by the importer to the unit of the assessee from the port. Therefore, the goods never went to the manufacturing unit of M/s. Essar Gujarat Limited. For such a situation the proviso to sub-rule (2) of Rule 57-G states that the relevant document indicating payment of duty would be bill of entry. 11. Now in the present case, as far as bills of entry dated 30-5-1994 and 31-5-1994 are concerned, bills of entry were produced by the assessee which indicate that M/s. Essar Gujarat Limited had paid duty at the time of import and therefore, the assessee was entitled to take MODVAT credit for the duty paid on the imported goods. 12. 11. Now in the present case, as far as bills of entry dated 30-5-1994 and 31-5-1994 are concerned, bills of entry were produced by the assessee which indicate that M/s. Essar Gujarat Limited had paid duty at the time of import and therefore, the assessee was entitled to take MODVAT credit for the duty paid on the imported goods. 12. However, when we come to the third bill of entry dated 6-6-1994, only the above certificate at p. 42 of the paper book was relied upon and the triplicate copy of the bill of entry was not produced. In the circumstances, in our view, the respondent had wrongly availed of MODVAT credit of Rs. 1,78,582 on the quantity of 212.659 MT scrap referred to in the above chart. 13. In the circumstances, the civil appeal filed by the Department to that extent succeeds. 14. The appeal is partly allowed with no order as to costs. Appeal partly allowed.