Modvat credit on duty-paying gate passes cannot be denied for lack of separate endorsement when documents already identify the assessee.

Modvat credit could not be denied merely because the duty-paying gate passes were not separately endorsed, where the documents already showed the assessee's name, address and consignee details linking the inputs to it. A fresh endorsement was unnecessary because the original records sufficiently identified the assessee as the intended recipient and user, and neither the Rules nor the prescribed procedure prohibited credit on such documents. The departmental objection was treated as overly technical, so the disallowance of credit and the personal penalty were unsustainable.

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Issues: Whether Modvat credit could be denied on the ground that the duty-paying gate passes were not separately endorsed in favour of the assessee at the time of receipt of inputs.

Analysis: The gate passes disclosed the assessee's name and address as the customer, and also contained the consignee details linking the goods to the assessee. The requirement of a fresh endorsement was unnecessary where the original documents already sufficiently identified the assessee as the intended recipient and user of the inputs. There was nothing in the Rules or prescribed procedure barring credit on an endorsed gate pass, and the departmental objection was found to rest on an unduly technical reading of the Board's clarification.

Conclusion: Modvat credit was wrongly disallowed, and the denial of credit as well as the personal penalty were unsustainable.

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