Modvat credit requires a valid prescribed document; private endorsement of a gate-pass cannot cure receipt by another consignee.

Modvat credit was available only when duty-paid inputs were received under a statutorily prescribed and valid document evidencing duty payment and traceability. A gate-pass issued in the name of one consignee could not be converted into a valid document for another recipient by private endorsement after clearance and receipt of the goods. Because the prescribed procedure under the rules was not followed, the endorsement did not satisfy the document requirement and the credit claim was inadmissible.

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Issues: Whether Modvat credit could be availed on duty-paid inputs received under a gate-pass originally issued in the name of another consignee and subsequently endorsed in favour of the assessee.

Analysis: Rule 57G required receipt of inputs under the cover of a gate-pass or other prescribed document evidencing payment of duty. The prescribed gate-pass under Rule 52A contained particulars such as the consignee and quantity to ensure traceability of the goods and to prevent misuse. Once the goods had been received by the original consignee, the gate-pass could not be treated as valid for a different recipient merely by private re-endorsement of part of the consignment. The proper course was compliance with the prescribed statutory procedure, and the absence of such compliance was fatal to the claim for credit.

Conclusion: The endorsement was not a valid substitute for the prescribed document, and Modvat credit was inadmissible to the assessee.

Ratio Decidendi: For Modvat purposes, credit can be taken only on receipt of inputs under a statutorily prescribed and valid document, and a gate-pass issued to another consignee cannot be made valid for a different recipient by private endorsement after clearance and receipt of the goods.

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