Modvat credit on duly endorsed pre-1-4-1994 gate passes remains valid when prescribed particulars and supporting documents exist.

Modvat credit remained admissible where a gate pass issued before 1-4-1994 was later endorsed by the manufacturer's depot and dealer, and the supporting invoice and prescribed particulars were available. The governing notification and Board circular treated such documents as valid for Modvat purposes, and the absence of any dispute about receipt or use of the inputs meant the later endorsement did not defeat credit. A departmental objection based only on a reference pending in another matter was insufficient to deny the benefit. The legal effect was that duly endorsed pre-1-4-1994 gate passes could support Modvat credit when the recognised documentation requirements were met.

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Issues: Whether Modvat credit was admissible on the basis of a gate pass issued before 1-4-1994 and subsequently endorsed after that date, together with the corresponding invoice and circular-based documentation.

Analysis: The gate pass had been issued prior to 1-4-1994 and was thereafter endorsed by the manufacturer's depot and the dealer, with an invoice also produced. The applicable notification and the Board's circular treated such documents as valid for Modvat purposes, provided the prescribed particulars were available. In the absence of any dispute regarding receipt and use of the inputs, the later endorsements did not disqualify the credit. The departmental objection based on the pendency of a reference in another matter did not, by itself, furnish a ground to deny the benefit.

Conclusion: Modvat credit was admissible, and the departmental challenge was not sustainable.

Ratio Decidendi: Where a gate pass issued before 1-4-1994 is duly endorsed and the prescribed particulars are available, Modvat credit cannot be denied merely because the endorsement was made after that date, if the governing notification and circular recognise the document as valid.

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