Modvat credit on gate pass and later invoice remained valid under the amended document regime and circular extension.

Modvat credit remained available on the strength of a pre-1-4-1994 gate pass and the later invoice/document, because Rule 57G and the amended Rule 57H regime accepted prescribed manufacturer-issued documents and the CBEC circular extended their acceptance up to 31-12-1994. The assessee had filed the declaration, maintained contemporaneous proof of receipt of goods, and availed credit within the extended period in December 1994. Refusal of credit only because the invoice was produced later was treated as unduly technical, and the departmental directions denying credit were liable to be set aside.

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Issues: Whether the assessee was entitled to Modvat credit on the strength of a gate pass issued before 1-4-1994 and the subsequent invoice/document, notwithstanding the departmental stand that credit could not be taken after 30-6-1994.

Analysis: Rule 57G of the Central Excise Rules, 1944 entitled an assessee to Modvat credit on prescribed documents, and the transition from gate pass to invoice under the amended regime did not alter the substantive entitlement. The Central Board of Excise and Customs, by the circular issued after amendment of Rule 57H, prescribed invoice/document issued by the manufacturer as a valid document and extended acceptance of such documents up to 31-12-1994. The assessee had filed the declaration, had contemporaneous documents showing receipt of goods, and availed credit in early December 1994. The refusal of credit merely because the invoice was produced later was treated as an unduly technical approach, especially when the circular was intended to remove hardship arising from the 1994-95 budget changes and the Revenue's own materials showed that such documents were acceptable within the extended period.

Conclusion: The assessee was entitled to Modvat credit and the impugned directions and communications denying that credit were liable to be set aside.

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