Modvat credit on endorsed duty documents cannot be denied where Board instructions exceed Rule 57G authority.

Modvat credit remained available on gate passes or challans even where additional endorsements were made, because the documents continued to evidence duty payment. The proviso to Rule 57G(2) empowered prescription of duty-paying documents, but did not authorise a limit on endorsements. Board instructions restricting endorsements were therefore administrative and could not override the rule or defeat credit otherwise admissible. On that basis, the Tribunal held that its earlier order did not give rise to the reference question framed by the Revenue and declined to refer the matter to the High Court.

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Issues: Whether the Tribunal could grant Modvat credit on gate passes or challans bearing more than the permissible number of endorsements, and whether a reference to the High Court was warranted on the asserted conflict with Board instructions issued under Rule 57G.

Analysis: The prescribed documents continued to evidence payment of duty even after additional endorsements. The power under the proviso to sub-rule (2) of Rule 57G was confined to prescribing duty-paying documents and did not extend to fixing a limit on endorsements. Instructions restricting endorsements were therefore administrative in character and not an exercise of statutory power. On that footing, the Tribunal's earlier order did not raise the question framed in the reference applications.

Conclusion: The Tribunal held that the reference question did not arise from its order and declined to refer the matter to the High Court.

Final Conclusion: The applications for reference were rejected, and the Revenue obtained no relief.

Ratio Decidendi: Board instructions that go beyond the statutory power to prescribe duty-paying documents and merely regulate endorsements are administrative instructions and cannot defeat Modvat credit otherwise available under the rule.

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