Modvat credit on endorsed gate passes remains admissible when goods reach the user factory and no double credit is taken.

Modvat credit was considered admissible on endorsed gate passes issued before 1-4-1994 where the duty-paying documents bore the head office or another unit's address, because the goods were actually received and consumed by the user factory and there was no double availment of credit. The Tribunal treated the prescribed document requirements as satisfied on these facts and held that the name or address shown on the gate pass did not, by itself, defeat credit in a multi-unit manufacturing setup. The departmental objection was therefore rejected and the entitlement to credit sustained.

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Issues: Whether Modvat credit could be denied when the gate passes were issued in the name of the head office but the goods were received and consumed by the user factory, and the documents were endorsed after 1-4-1994 under the relevant exemption notification and Modvat rules.

Analysis: The Tribunal noted that the relevant notification contemplated endorsed gate passes and other specified documents, and that the gate passes in question had been issued before 1-4-1994 though endorsed later. It also accepted that in a multi-unit company, the mere fact that the duty-paying document bore the address of another unit or the head office did not, by itself, make the credit inadmissible when the goods were actually received by the user factory and there was no double availment of credit. Reliance placed on earlier Tribunal decisions was found appropriate on the facts.

Conclusion: Modvat credit was held admissible and the objection based on the name and address shown in the gate passes was rejected.

Final Conclusion: The departmental challenge to the allowance of Modvat credit failed, and the assessee's entitlement to credit on the endorsed gate passes was sustained.

Ratio Decidendi: For a multi-unit manufacturer, Modvat credit cannot be denied merely because the duty-paying document bears the head office or another unit's address, if the goods are received by the user factory and the document otherwise satisfies the prescribed requirements.

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