MODVAT credit required prescribed documentary proof; gate passes endorsed three times could not validly support the claim.

MODVAT credit was admissible only on documents expressly authorised by Rule 57G and the applicable Board notification. Because the relaxation for gate passes was limited to the notified documentary conditions, gate passes endorsed three times fell outside the permitted category and could not support credit. The Tribunal held that such documentary relaxation could not be extended beyond its express terms and that compliance with the prescribed proof requirements remained mandatory. The lower authority's allowance of credit was therefore set aside, and the Revenue's position was upheld.

---

---

Issues: Whether MODVAT credit could be availed on inputs received under gate passes endorsed three times, when the governing rule and Board notification permitted credit only on prescribed documents and, at the relevant time, on gate passes endorsed once.

Analysis: Rule 57G required the manufacturer to take credit only on the documents specified by the rule or on such additional documents as were notified by the Board. The Tribunal held that the Board's relaxation permitting use of gate passes was limited to the documents and conditions expressly notified, and that such relaxation could not be extended to gate passes endorsed beyond the permitted limit. The Tribunal followed its earlier view that prescribed documents alone were valid for MODVAT purposes and relied on the principle that any relaxation in the verification regime operates prospectively and cannot validate documents outside the notified category. It also noted that the Bombay High Court had upheld the requirement of compliance with the prescribed documentary proof for availing credit.

Conclusion: MODVAT credit on gate passes endorsed three times was not admissible, and the allowance of credit by the lower authority was in law and set aside in favour of the Revenue.

Final Conclusion: Credit under the MODVAT scheme could be taken only on the documents authorized under Rule 57G and the applicable Board notification, and documents outside that authorization could not support the claim.

Ratio Decidendi: Where a fiscal credit scheme prescribes specific documents and delegates limited power to the Board to notify additional documents, credit is admissible only on compliance with the prescribed or notified documentary conditions; unnotified or over-extended documents cannot be treated as valid for taking credit.

---