Certified copy of lost gate pass can support MODVAT credit; demand also fails where there is no suppression.

MODVAT or proforma credit cannot be denied where the original gate pass is lost, if a duly certified copy is produced in accordance with the applicable Board circular. The circular permits credit on certified documents, and an indemnity bond is required only when credit is taken immediately; on the stated facts, refusal of credit for want of such bond was unjustified. A duty demand raised long after the credit was taken was also time barred because there was no allegation of suppression or misstatement and the department had accepted the relevant returns. The credit was therefore admissible and the consequential demand unenforceable.

---

---

Issues: (i) Whether MODVAT or proforma credit could be denied when the original gate pass was lost but a duly certified copy was produced in accordance with the Board circular. (ii) Whether the duty demand was barred by limitation.

Issue (i): Whether MODVAT or proforma credit could be denied when the original gate pass was lost but a duly certified copy was produced in accordance with the Board circular.

Analysis: The proviso to Rule 57G(2) required receipt of inputs under prescribed duty-paying documents, but the Board circular permitted proforma credit where the original GP-1 was lost in transit if a gate pass duly certified by the proper officer was produced. The requirement of an indemnity bond applied only where credit was taken immediately. On the facts, the assessee produced the certified documents and complied with the circular, so denial of credit on the ground of non-execution of bond was not justified.

Conclusion: The assessee was entitled to the credit and the denial was unsustainable.

Issue (ii): Whether the duty demand was barred by limitation.

Analysis: The demand was raised long after the relevant credits had been taken, and the record showed no allegation of suppression or misstatement. The department was aware of the availment and the RT-12 returns had been accepted. In those circumstances, the extended demand could not be sustained as time barred.

Conclusion: The demand was barred by limitation.

Final Conclusion: The impugned order was set aside and the appeal succeeded because the credit could not be denied and the demand was unenforceable on limitation.

Ratio Decidendi: Where the Board's circular permits credit on a certified copy of the lost gate pass and the department has knowledge of the availment without any suppression, credit cannot be denied and the consequential demand fails on limitation.

---