Good-faith reliance on a departmental gate pass can protect Modvat credit despite procedural delay in issue.

Modvat credit was stated to be unavailable where taken on a subsidiary gate pass issued after the time limit in Notification No. 16/94-C.E. (N.T.), but the commentary explains that denial was not justified when the jurisdictional Superintendent himself ? Need English only. The department's own officer issued the document despite the notification, and the assessee relied on it in good faith. On that footing, the procedural lapse was attributed to the department, the credit was not required to be reversed, and the assessee was entitled to retain the benefit.

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Issues: Whether Modvat credit could be denied when the assessee acted on a subsidiary gate pass issued after the date permitted by Notification No. 16/94-C.E. (N.T.), and the delay was attributable to the departmental officer who continued to issue the document.

Analysis: The notification permitted credit only for prescribed documents issued within the stipulated time and for credit taken within the notified period. The assessee took credit on the basis of a subsidiary gate pass issued later than the permissible date. However, the jurisdictional Superintendent himself issued the document in the face of the notification, and the assessee relied on that document in good faith. The denial of credit was therefore not justified where the procedural error originated with the department and the assessee should not be made to suffer for it.

Conclusion: The credit could not be reversed, and the assessee was entitled to retain the benefit.

Final Conclusion: The revenue appeal failed, and the denial of Modvat credit was not sustained.

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