Modvat credit cannot be denied for mere non-endorsement of a gate pass where receipt and non-use elsewhere are verified.

Modvat credit under Rule 57G could not be denied merely because a gate pass was not endorsed in the assessee's favour. The absence of endorsement was treated as a curable procedural defect, not a permanent bar, where the inputs were received and used in manufacture. The assessee could regularise the position by obtaining endorsement or producing a dealer's certificate confirming transfer of the consignment and that no other person had availed Modvat on the same document. The Department was then required to verify the claim before granting credit, provided the document had not been used elsewhere.

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Issues: Whether Modvat credit could be denied merely because the gate pass was not endorsed in favour of the assessee.

Analysis: Credit under Rule 57G of the Central Excise Rules required an endorsed gate pass as a recognised duty payment document. However, non-endorsement by itself was treated as a curable defect and not as a ground to permanently deny credit where the inputs were received and used in manufacture. The assessee was permitted to obtain endorsement or produce a certificate from the dealer confirming transfer of the consignment and non-availment of Modvat benefit by anyone else, after which the Department could verify the claim and grant credit if the document had not been used elsewhere.

Conclusion: Denial of Modvat credit solely for want of endorsement was not upheld, and the appeal succeeded with directions to cure the defect and establish that the credit had not been availed elsewhere.

Final Conclusion: Modvat credit was held to be available on satisfaction of the documentary verification requirements, and the matter was permitted to proceed on the basis of proper endorsement or equivalent certification.

Ratio Decidendi: A procedural defect in the endorsement of a gate pass does not by itself defeat Modvat credit if the assessee can establish receipt of the inputs and that the document was not used to obtain credit elsewhere.

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