Modvat credit on endorsed gate passes remained available, as multiple endorsements did not change the document's statutory character.

A gate pass remained an eligible document for Modvat credit under the relevant excise rule even after endorsement more than twice, because endorsement did not alter its character as a gate pass. The administrative endorsement instructions were only facilitative trade measures and had no independent legislative force, so they could not expand or restrict the rule. Credit could not be denied merely on the ground of multiple endorsements where revenue was not prejudiced.

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Issues: Whether a gate pass endorsed more than twice remained an eligible document for taking Modvat credit under the prescribed excise rules.

Analysis: The prescribed eligible documents under the relevant rule included a gate pass, and a gate pass retained its character as a gate pass even after endorsement. The endorsement practice and related facilitation measures were administrative arrangements intended to assist trade movement of goods and did not derive independent legislative force from the rule. An endorsed gate pass did not become a separate document requiring separate statutory authorization, and the text of the administrative instructions could not be read as expanding or restricting the rule beyond its terms. The application therefore did not disclose a legal error in the view that credit could not be denied merely because the gate pass had been endorsed more than twice, provided revenue was not prejudiced.

Conclusion: The question of law was not made out, and the application was dismissed in favour of the assessee.

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