Central excise credit under Rule 56A may survive intermediary gate passes if direct manufacturer-to-factory receipt is proved.

Under Rule 56A of the Central Excise Rules, credit could not be denied solely because the gate passes were issued in the name of the sole distributor and the Superintendent's certificate under the trade notice was not produced. The decisive issue was whether the relays and thermostats were in fact moved directly from the manufacturer to the assessee's factory without being stocked in the distributor's godown. If that factual position was proved to the satisfaction of the jurisdictional Assistant Collector, the procedural defect would not defeat credit and consequential relief could follow.

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Issues: Whether credit of central excise duty could be denied under Rule 56A(1) of the Central Excise Rules, 1944 because the gate passes were originally issued in the name of the sole distributor and the Superintendent's certificate under the trade notice was not produced, and whether relief could still be granted if the goods were proved to have moved directly from the manufacturer to the assessee's factory.

Analysis: The governing requirement under Rule 56A was that the goods should satisfy the prescribed procedure for availing credit. The denial below rested on the fact that the gate passes stood in the distributor's name and that the certificate contemplated by the trade notice had not been filed. However, the decisive consideration was whether the relays and thermostats had in fact been removed directly from the manufacturer's premises to the assessee's factory without being stocked in the distributor's godown. If that factual position was established to the satisfaction of the jurisdictional Assistant Collector, the earlier departmental view relied upon by the parties would apply and the procedural objection would not defeat relief.

Conclusion: Credit was not unconditionally granted, but the assessee was held entitled to favourable consideration and consequential relief if direct movement from the manufacturer to the factory was proved to the satisfaction of the Assistant Collector.

Final Conclusion: The revision was disposed of by leaving the assessee's entitlement to credit to be determined on proof of direct receipt from the manufacturer, with consequential relief to follow if that factual condition was satisfied.

Ratio Decidendi: Under Rule 56A, credit cannot be denied merely because the gate pass was initially issued in the name of an intermediary if the goods are proved to have been directly received from the manufacturer in the recipient's factory in accordance with the prescribed procedure.

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