Modvat credit on transitional invoices against endorsed gate passes is admissible where Board clarification treats them as duty-paying documents.

Invoices issued during the transitional period against gate passes endorsed after 1-4-94 were treated as valid duty-paying documents for Modvat credit under Rule 57G. The Board's circular dated 26-4-96 clarified that such invoices for the relevant period were proper documents, and the Tribunal had already applied that clarification to uphold credit on similar transactions. As a result, Modvat credit was admissible on the invoices and the challenge to the credit claim failed.

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Issues: Whether Modvat credit was admissible on the basis of invoices issued against gate passes endorsed after 1-4-94, where the invoices and gate passes related to the period 1-4-94 to 11-5-94.

Analysis: The credit claim was supported not only by endorsement of the gate passes but also by invoices issued by the dealers. The Board's circular dated 26-4-96 clarified that invoices issued for the relevant period were proper duty-paying documents under Rule 57G of the Central Excise Rules. The Tribunal had already applied that circular to uphold Modvat credit on invoices issued against gate passes during the same period.

Conclusion: The invoices were valid duty-paying documents and Modvat credit was admissible. The Revenue's challenge failed.

Final Conclusion: The impugned order allowing the credit was sustained and the Revenue's appeal was rejected.

Ratio Decidendi: Invoices issued for the relevant transitional period against gate passes are valid duty-paying documents for Modvat credit under Rule 57G where the Board's circular so clarifies.

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