Modvat credit on repeatedly endorsed gate passes remains available if duty payment and prior credit non-availment are shown.

Modvat credit under Rule 57G could not be denied merely because a gate pass was endorsed three times, since the document continued to retain its character as a duty-paying document despite successive endorsements. Board instructions limiting endorsements to two were treated as administrative implementation measures and not as a source of fresh statutory restrictions overriding entitlement under the scheme. The material also did not show that the goods had lost their original packing, and the relevant verification remained whether earlier endorsers had already taken credit. Where duty payment and prior non-availment of credit are established, the third endorsement alone does not defeat credit.

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Issues: Whether Modvat credit could be denied on a gate pass endorsed thrice, and whether Board instructions limiting endorsements to two controlled the availability of credit under Rule 57G.

Analysis: The gate pass remained the same duty paying document notwithstanding successive endorsements, and the administrative instructions of the Board were treated as measures for implementation of the scheme rather than as a source of fresh statutory documents. The Tribunal also found no material to show that the goods were not in original packing, and considered the revenue risk from a third endorsement to be no greater than from earlier endorsements, provided it could be shown that the endorsing parties had not themselves taken credit.

Conclusion: Modvat credit could not be denied merely because the gate pass had been endorsed three times, and the matter required verification of whether prior endorsers had already availed credit.

Ratio Decidendi: A gate pass prescribed as a duty paying document does not lose that character merely because it is endorsed more than twice, and administrative Board instructions cannot override the statutory entitlement where duty payment and non-availment of prior credit are established.

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