Modvat credit cannot be denied for initial gate pass non-endorsement when goods were received and no double benefit arose.

Modvat credit was treated as available where inputs were used in manufacture and the only objection was that the accompanying gate passes were not initially endorsed in the appellant's name. Non-endorsement was regarded as a curable documentary defect when the goods had in fact been transferred to and received by the appellant and no double benefit had been claimed by another person. On that basis, the defect in the gate passes was not considered fatal once the transfer was regularised, and credit could not be denied solely for the initial endorsement lapse.

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Issues: Whether Modvat credit could be denied merely because the gate passes accompanying the inputs were not initially endorsed in the name of the appellant.

Analysis: The credit was claimed on inputs used in the manufacture of the final product, and the dispute turned on the absence of endorsement on the gate passes. The governing approach treated non-endorsement as a curable defect where the goods had in fact been transferred to and received by the appellant, and where no double benefit had been taken by any other person. In view of the precedent relied upon, the defect in the document was not treated as fatal once the transfer of the goods had been regularised.

Conclusion: Modvat credit could not be denied solely for the initial non-endorsement of the gate passes, and the appellant succeeded.

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