CENVAT credit cannot be denied for mere gate pass non-endorsement when diverted inputs and duty payment are proved.

Credit of duty on inputs under Rule 57A could not be denied merely because the gate pass was not endorsed in the assessee's name where the consignment was in fact diverted to the assessee and supported by the consignor's letter. The admitted duty payment, the diversion explanation, and the document from the consignor established actual receipt of the inputs for manufacture. The defect was procedural, not substantive, so denial of credit and reversal of the demand were not sustainable.

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Issues: Whether credit of duty on inputs could be denied merely because the gate pass was not endorsed in the assessee's name, when the goods were in fact diverted to the assessee and supported by a letter from the consignor.

Analysis: The credit scheme under Rule 57A of the Central Excise Rules, 1944 requires receipt of duty-paid inputs under proper documents, but the absence of an endorsement on the gate pass was not treated as conclusive where the consignment was actually diverted to the assessee. The document issued by the consignor, together with the admitted duty payment and the explanation for diversion, established the factual receipt of the inputs for manufacture. The defect was therefore procedural rather than substantive.

Conclusion: Credit could not be denied solely on the ground of non-endorsement of the gate pass, and the demand for reversal was not sustainable.

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