Modvat credit on transitional documents cannot be denied solely because subsidiary gate passes were issued after the cut-off date.

Modvat credit could not be denied solely because subsidiary gate passes were issued after 1-4-1994 where the original gate pass had been issued on 31-3-1994 and invoices were produced during the transitional period. Notification No. 16/94 treated subsidiary gate passes as valid documents for credit, subject to the relevant issue-and-use conditions, and the tribunal noted that the documents were generated within a reasonable time. The appellate authority erred by rejecting credit only on the date of the subsidiary gate passes without examining the invoices or the Board's relaxation for the transitional period. The matter was remanded for fresh consideration of those documents and instructions after hearing the assessee.

---

---

Issues: Whether Modvat credit could be denied merely because subsidiary gate passes were issued after 1-4-1994, when the goods were covered by an original gate pass issued on 31-3-1994 and invoices were produced during the transitional period.

Analysis: The Notification No. 16/94 treated subsidiary gate passes as valid documents for Modvat credit, subject to the proviso regarding the period of issue and use. The tribunal noted that the original gate pass had been issued before 1-4-1994, the subsidiary gate passes were generated within a reasonable time, and invoices from the manufacturer's sole agents had also been produced. The appellate authority had rejected the credit only on the basis of the date of the subsidiary gate passes without examining the invoices or the Board's relaxation for the transitional period.

Conclusion: Denial of Modvat credit on that sole ground was unsustainable. The order was set aside and the matter was remanded for fresh consideration of the invoices and the Board's instructions, after giving due hearing.

---