Endorsed gate pass for part supply can support Modvat credit when quantity and duty are identifiable on the document.

A twice-endorsed GP-1 used for part supply was treated as a valid duty paying document for Modvat credit where the endorsement identified the quantity supplied and the duty could be ascertained on an ad valorem basis. The governing circular permitted endorsement of the main gate pass for the remaining consignment if no subsidiary gate pass had been issued on its strength and the part-supply quantity and duty were shown in the endorsement. As no endorsement indicated issue of a subsidiary gate pass, and the duty amount was verifiable from the quantity particulars, no further verification was required. Modvat credit on that basis was permissible.

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Issues: Whether a GP-1 endorsed twice for part supply of goods, where the endorsement specifies the quantity supplied and the duty involved can be ascertained on an ad valorem basis, is a valid duty paying document for availing Modvat credit.

Analysis: The Circular relied upon permits endorsement of the main GP-1 for rest of the consignment in cases of part supply, subject to two requirements: no subsidiary gate pass having been issued on the strength of the main gate pass, and the quantity supplied in part as well as the duty involved being indicated in the endorsement. The absence of any endorsement on the GP-1 stating that a subsidiary gate pass had been issued supported the view that no such gate pass was issued. The second endorsement clearly specified the quantity supplied to the appellants, and since duty was ad valorem, the amount of duty could be worked out from the quantity and total quantity covered by the gate pass. No further verification was necessary.

Conclusion: The endorsed GP-1 for part supply was a valid duty paying document and the Modvat credit taken on that basis was permissible.

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