Transitional Modvat credit on pre-1994 gate passes upheld under Rule 57H despite validity objection

Modvat credit was admissible on inputs lying in stock where the duty-paying gate passes were issued before 1-4-1994, because Rule 57H(4) specifically governed transitional credit documents and operated notwithstanding Rule 57G. The Tribunal held that this provision covered the acceptance of such documents for credit and was not limited to the filing of a declaration alone. The department's objection that gate passes had ceased to be valid duty-paying documents after 30-6-1994 was rejected, and the Tribunal followed its earlier decision on the same issue in the assessee's own case.

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Issues: Whether Modvat credit was admissible on inputs lying in stock and supported by gate passes issued before 1-4-1994 under Rule 57H of the Central Excise Rules, 1944, despite the department's objection that gate passes had ceased to be valid duty-paying documents after 30-6-1994.

Analysis: Rule 57H(4) specifically contemplated the relevant duty-paying documents and operated with a non obstante clause in relation to Rule 57G. The Tribunal found that this statutory setting answered the department's objection, since the provision itself governed the documents acceptable for transitional credit and was not confined to the filing of declaration alone. The Tribunal also followed its earlier decision on the same question in the respondent's own case.

Conclusion: Modvat credit was admissible and the department's objection failed.

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